NFT and Metaverses are potential Ponzi schemes

NFT and Metaverses could be financial bubbles, Ponzi schemes, or other forms of deception. This is according to the Communist Party of China’s Central Political and Legal Commission’s official blog.

The body is in charge of carrying out the Party leadership’s administrative, political, and legal directives.

The commission took note of the high level of interest in the sector. According to the blog’s founders, a piece of virtual land on The Sandbox platform sold for $4.3 million, breaking the previous record of $2.43 million set on Decentraland.

J.J. Lin, a Singaporean singer, also acquired three residences for $113,000 in this virtual environment.

Investigations relate NFT and Metaverses to threats and financial fraud

The authors pointed out that Decentraland explicitly indicates that there is a scarcity of virtual land for users. Plots are auctioned off, and purchasers use NFT to place bids.

When a specific amount of merchandise is available in a market, the price rises as more people arrive. The writers believe it is easier to create a buzz in the virtual world than it is in the real world.

They also remarked on society’s “hazy” comprehension of the metaverses itself.

“Everyone has views about the meta-universe,” the commission stated, “but it lacks a recognized description.”

Many papers and investigations, according to the site, hint to an existing price bubble in digital collections and relate NFT and Metaverses to threats like money laundering and financial fraud.