Scams in the Metaverse: How Do You Protect Yourself?

The possibilities of the metaverse come with their attractions. But they will also have significant implications for cybersecurity and fraud. In the next 5 years we will inevitably move to the metaverse. So companies will have to focus on safety and regulatory issues. They need to make sure that end users are protected from metaverse scams.

Conceived more than 30 years ago by science fiction author Neal Stephenson, the “metaverse” is the biggest buzzword of 2022. It is a pivot to a “cyber world” where we will use a “digital identity” to work and communicate socially. The metaverse has managed to attract major brands such as Epic Games, Microsoft, and Apple. Most notably, Facebook renamed Meta and invested $10 billion in the project.

However, new technologies often come with high levels of risk. And the metaverse is no exception. Fraudsters have already started exploiting this new online universe. We explain some of the metaverse scams you may encounter.

Examples of Metaverse Fraud and Scams

Any organization offering crypto-based services, and individuals venturing into the metaverse and wider adjacent crypto ecosystem, are: faced with different risks† Many of the issues discussed below existed before crypto even existed, in virtual worlds such as: The Sims, World of Warcraft and Second Life

Account Takeovers (ATO)

Account takeover is a form of online identity theft. A cybercriminal acquires illegally unauthorized access to someone else’s account† We can cite traditional methods such as: fishing to access accounts containing currencies or NFTs.

Irreversible operations

The crypto is known for its transparency, due to the blockchain’s open record information. However, once a transaction has been made it is almost impossible to reverse it

Metaverse and Multi Account Scams

Fraudsters can try to create multiple accounts on a particular metaverse platform for money laundering illegally obtained or attempt to abuse promotions.

Metaverse scams and fake reviews

Fake reviews do a lot of damage to brand reputation. For example, a targeted attack by fake reviews via bots can easily deter consumers and lead to: price drop of a token

Influencer and Affiliate Fraud

A well-known example of crypto influencer fraud saw the accounts of celebrities like Elon Musk and Jeff Bezos hacked as part of a bitcoin scam. Something similar could be happening in the metaverse.

ecommerce fraud

ecommerce fraud

Managing assets online, even in digital form, is giving way to typical scenarios in the e-commerce industry. For only the . to quote chargebacksrefunds and other dispute settlement

Fraudulent projects

The unregulated nature of NFTs and cryptography can promote: scam schemes in major markets. They can also generate copyright and intellectual property issues

Market Volatility

Users often trade tokens without actually interacting with the platform itself to make money. The carpet pulls and the honeypot scam are something to watch out for.

Carpet pullers or carpet pullers

New technology brings opportunistic bad actors, perhaps the most famous of which is a digital token inspired by the Netflix series squid game which was introduced as a metaverse game to earnSQUID digital currency turned out to be a complete scam. It lost all its value almost immediately, the developers flee with all the money

Metaverse scams and data breaches

Data Violations

Email data breaches are a worldwide problem. As technology becomes more accessible, metaverse platforms must ensure the protection of their users’ data to prevent… not lose consumer confidence

Cisco Talos Intelligence Group: The Metaverse Is Already Creating New Opportunities for Cybercriminals

A new type of cyber attack relies on smart contracts that run automatically when certain conditions are met. In theory, smart contracts guarantee that a buyer will receive a digital asset such as an NFT as soon as they submit payment. But scammers set it up evil smart contracts who don’t do what they say they do.

“We see malicious smart contracts where they require you to approve a transaction† But in fact you are running a function that uses a third party access to all tokens and cryptocurrency in your wallet “, said Jaeson Schultz, Talos Technical Managerone of the largest commercial intelligence teams in the world.

“It’s very easy for people to fall into the trap. In fact, few will take the time to read the smart contract, even if it is published.

Talos researchers also saw cybercriminals mimicking trusted brands. Then they let people spend money. For example, an Ethereum user claimed domain names such as wellsfargo.eth. This could open the door for scams posing as these brands to scam people. And because the blockchain architecture is decentralized without a single administrator, there is no no recourse to return these domains to their rightful owners

Which solutions to stop metaverse fraud and scams?

Fraud prevention is a constant struggle. Fraudsters will indeed always try new methods to defraud companies and people. But there are some things platforms can do to block scammers before they have a chance to test the new frontier.

Browser and Device Fingerprints

identify device configuration

Being capable of identify the device configuration of someone can spot emulators, virtual machines and bots. Invisible devices should be another indicator of potential risk. With more hardware in use, including VR headsets, computers and mobile phones, we know the devices, customer location and configuration can be a very easy way to spot misalignment and potential risks.

Digital Fingerprint Analysis

Seeing a user’s digital fingerprint is especially helpful when users register. By simply using an email or phone number, companies can: check the validity of accounts† In fact, most honest users will have some form of online footprint, be it social media presence or web platform activity.

IP analysis

Find out the IP address of an honest user, then identify an incompatibility must immediately trigger an alarm

Two-factor authentication (2FA)

use two-factor authentication

Some services may require: two-step verification requirements in case of mismatch. This adds friction, but protects users better in certain situations.

facial biometrics

Metaverse creators must provide users with the ability to associate offline identities with their metaverse by using modern identity verification technologies. This will ensure that people have a chance to confirm to the metaworld that they are who they say they are. The facial biometrics is an effective solution to this problem. In fact, the technology can authenticate a person during registration and improve ongoing authentication.

At the same time, the liveness detection is also essential. Once a person’s selfie is linked to a photo on their registered ID or biometrics, the vibrancy checks to make sure they’re really there, not just someone with a screenshot.

The power of AI to spot fraudsters has been proven. New research shows that computers can determine whether a face is real or a parody much better than humans. Of Research SuperCluster (RSC)an artificial intelligence supercomputer, said to be up to 20 times faster than existing supercomputers, Meta has enough power to support hyperscale biometric technology during the registration process.

They also need to channel that power into technologies that will enable them to… mediocre content to scale and to authenticate users during their passage through the metaverse.

The Multi-Layer Defense

an artificial intelligence supercomputer can support biometric technology

The best way to prevent fraud and scams in the metaverse is to stay ahead with a multi-layered defense. Business leaders must aware of ever-changing regulations and new attacks to provide adequate protection.

Thanks to innovative technologies such as: that machine learning and artificial intelligence, the wealth of data available to businesses can help identify and stop threat actors through device fingerprinting, two-factor authentication, and fast, seamless user fingerprint scanning. Leaders must remain diligent focus on risk management† The transition to the new online world can only go smoothly if you remain alert to the risks.

About smart contracts

read smart contracts carefully before signing them

Jaeson Schultz, mentioned above, recommends people or companies doing business in the metaverse avoid sharing information about the assets they ownwhich could make it a target for scammers.

“Buyers should also read smart contracts carefully before signing them “, he added. Ideally, people making trades should: transfer the exact amount of cryptocurrency to a separate wallet instead of connecting their primary wallet.

In short

There is a lot of hype and opportunity on the metaverse. And metaverse companies can make a lot of money and completely change the way we socialize.

But in their early days, it’s vital that these platforms sfocus as much on their risk management practices as they do on new features† On the contrary, the general public will quickly lose confidence and thus all interest in the metavers.

Use of industry experiences that have grown tremendously in recent years, such as eSports, iGaming and cryptography, should help these companies to understand the typical risks of new technologies that accept alternative payment methods.

Leave a Comment