According to a recent report, the metaverse’s increasing capacity for crime has primed it for regulation.
According to crypto researcher Elliptic Connect, corporations have already begun exploring the potential of the metaverse for new economic opportunities. In addition to increased Google searches for’metaverse,’ Elliptic’s recent report highlighted Facebook’s recent rebranding to Meta.
According to the report, many businesses, like Meta, are struggling to find an immediately profitable use case for the technology. However, it was discovered that at least 58% of respondents anticipated that the metaverse would provide some commercial opportunity for their company within the next five years. Furthermore, Citibank anticipates that the metaverse will be worth up to $13 trillion by 2030. While this suggests significant investment potential, it is also true for crime.
Elliptic’s report focused on the growing number of ways criminals steal from metaverse users. It included both traditional financial crimes like scams and fraud, as well as those more specific to digital assets. These include hacking and theft of digital assets belonging to metaverse service users.
However, it also highlighted crime, which is facilitated in particular by the shared digital space. Wearable non-fungible tokens, such as digital fashion and luxury items that can be worn in the metaverse, are becoming increasingly popular. These items, according to the report, could open up new channels for digital money laundering. It also cautioned against the metaverse being used to facilitate sex-related crimes such as non-consensual porn and sexual harassment.
As a result, the report predicted that regulators’ attention would be drawn to the growing risks in the coming year. In some cases, the procedure may be relatively simple. Simply clarifying where pre-existing regulation extends to activity in the metaverse, for example.
However, because the new paradigm creates new opportunities for crime, regulators will need to adopt new approaches as well. The report suggests using regulatory sandboxes to engage developers in the DeFi space. According to the report, Abu Dhabi Global Market is already doing this. In the United Arab Emirates, Dubai’s Virtual Assets Regulatory Authority has established a presence in the metaverse, setting a precedent.
