Recent alerts raised by anti-cybercrime group of the Philippine National Police drew attention to the latent risks associated with blockchain-based games, specifically those utilizing the popular ‘play-to-earn’ model. This type of gaming scheme, epitomized by popular platforms like Axie Infinity, carries more inherent risk than traditional cryptocurrency investments in the likes of Bitcoin or Ether.
The lack of need for operators to adhere to regulatory safeguards such as anti-money laundering measures tenders an environment potentially rife with fraud. Even the hallowed realm of non-fungible tokens (NFTs) isn’t safeguarded – gamers risk losing their assets to nefarious characters or simply through transferring incompatibly coded NFTs to a wallet.
Nevertheless, cryptocurrency gaming isn’t limited to these transactional risks. The inflationary and deflationary tendencies of the crypto market also extend to in-game tokens, and some games such as Axie Infinity limit the liquidity of these tokens. Blind spots in regulatory oversight coupled with market-driven pricing anomalies add a tedious layer of complexity and unpredictability to the safety of investments in this new digital frontier.
Play-to-earn models have sprouted another sphere of potential pitfalls – not least fake rewards. Described as a misleading lure by the Filipino ACG, its advisory implies that gamers are promised rewards in cryptocurrency for their involvement in regular gaming activities, but these rewards are often elusive or non-existent.
The often high entry cost – around $300, in Axie Infinity’s case – can dissuade prospective players from getting involved, especially given that most traditional video games come nowhere near that price point. While Axie itself wasn’t indicted of fraudulent activities, the notice draws attention to its business model’s vulnerability to the same risks plaguing the broader cryptocurrency marketplace.
Tactics used by cybercriminals have evolved, with malicious personas presenting their operations as legitimate gaming platforms. The bad actors are then able to slowly build trust with their victims whilst they play and “accumulate rewards”. The truth is then revealed when victims halt their deposits, only to find out all their in-game earnings have been siphoned off by hidden malware.
In light of these warnings, the police group implores internet-users to exercise utmost caution. They stress the importance of thorough prior research, keen vigilance against fraudulent entities, and careful selections of legitimate, licensed cryptocurrency exchanges. The future of blockchain gaming may be bright, but it’s crucial not to overlook these potential pitfall-laden shadows.
Source: Cryptonews
