Prior to the more recent rise of solutions like ChatGPT, virtual and augmented reality had widely been considered the ‘future’ of tech. In fact, the rise of the ‘metaverse’ was arguably one of the big tech trends of 2021. At the time, leaders in the space, such as Meta Platforms CEO Mark Zuckerberg, had predicted the technology would host a billion people by 2050. Since then, the company’s metaverse-focused Reality Labs division announced yearly losses of $13.7 billion, which may have somewhat dampened that enthusiasm.
Widespread acceptance of the metaverse has the potential to bring with it a lot of opportunities, particularly in the world of business. Companies working in sectors like blockchain, crypto, and Web3.0 will see wider spread use and the technology will almost certainly create new revenue streams for those producing digital goods. Unfortunately, alongside these positives, the metaverse will almost certainly suffer from many of the cybersecurity and online fraud concerns that plight the internet of today.
Evaluating New Risks
Let me begin with a very basic fact; fraudsters are always on the lookout for new opportunities to take people’s money. So, it’s a guarantee that bad actors have noticed all the hype surrounding metaverse projects and are already calculating how this can be used to facilitate online fraud. Specifically, predictions about the metaverse becoming a place where billions of dollars will soon flow freely will have undoubtedly captured the attention of fraudsters who will want to explore opportunities in this domain.
What exactly this fraud looks like remains to be seen, but there are early warning signs that must be recognised by those interested in this field. For one, many metaverse-connected technologies are expected to be blockchain-based. While blockchain-based applications do offer incredible transparency, they have also proved incredibly useful for fraudsters who are looking to launder money, steal identities and conduct scams. In fact, blockchain-based transaction crime hit a record-high in 2021 of $7.8 billion.
A reason why fraudsters are interested in the blockchain and crypto is that despite transactions being clearly recorded they’re decentralized, meaning there is no governing body regulating the system. While this has benefits to the user, it also gives scammers room to operate with impunity, making it virtually impossible for victims to reverse a transaction. This concern also extends to the field of NFTs, which we’ve already seen can be used to defraud people. Therefore, while many of these innovations serve an important purpose online, they must be adopted with caution.
Recognising Standard Concerns
It’s also important to recognise that many existing metaverse solutions are vulnerable as they’re unable to stop people from establishing more than one account. Having multiple accounts on a metaverse platform could allow fraudsters to take advantage of ‘free credit’, discounts or money-back promotions designed for new users. Especially as different metaverse platforms fight for early market share, this form of fraud could quickly become highly problematic as it has across other sectors, such as iGaming.
Likewise, metaverse platforms must also watch out for influencer fraud, which has previously affected other major social media platforms. This type of fraud can result in people following fraudulent links or entering sensitive data to enter promotions they believe to be endorsed by well-known, established users. Again, as different platforms vie for early customer adoption, it’s likely that fraudsters creating fake celebrity endorsements will be used as their marketing tactic, which makes this form of fraud harder to detect.
Building Capable Defences
Clearly, companies in this space must go to great efforts to ensure their platforms are properly fortified from the earliest launch dates, while also providing users with a frictionless experience. Thankfully, there are methods available to businesses in this field. For one, companies can layer existing defence systems with things like two-factor authentication and machine learning technologies that are able to more effectively identify and then boot out inauthentic users, bots, and high-risk ‘online personalities’.
Additionally, enabling browser and device fingerprinting can also make a huge difference in preventing fraud in the metaverse. In short, being able to identify someone’s device configuration can help to spot emulators, virtual machines, and bots. Digital footprint analysis also represents a major tool in this battle and can play a role to help verify the validity of accounts by assessing existing social media presence, web platform activity and instant messenger accounts.
By using the experiences of similar industries that have grown immensely over recent years, such as eSports, iGaming and crypto, metaverse platform builders could avoid the worst effects of online fraud within their platforms. By learning from others, metaverse companies will be able to offer its customers a technology that broadens horizons and delivers new opportunities for personal and economic fulfillment, while avoiding harm from those who only use the platform with nefarious intent.
