China warns against using metaverse as a tool for illegal fund-raising

FILE PHOTO: Visitor is pictured in front of an art installation which will be converted into NFT and auctioned online at Sotheby's, in Hong Kong
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BEIJING (Reuters) -China's banking and insurance regulator issued a warning on Friday against using the metaverse as a tool for illegal fund-raising, amid widespread interest in the country's private sector.

The China Banking and Insurance Regulatory Commission said in a statement published on its website that some companies were engaging in illegal fund-raising, fraud, and virtual real estate speculation.

"Beware of being duped, and if you find clues of suspected illegal crimes, please actively report this to the relevant local departments," the statement said.

Investors,entrepreneurs, and established Chinese tech giants have piled into the country's "metaverse", described as a virtual shared space that blurs the boundaries between the online and offline worlds. But the fervour has received mixed reactions from Chinese authorities.

While the ruling Communist Party and state media have issued calls for caution and warned about the risk of a metaverse bubble popping due to over-speculation and financing, some local governments have held symposiums on the topic and also described how it could be used to spread Party ideology.

(Reporting by Eduardo Baptista; Editing by Sam Holmes)