The Rise of Cryptocurrency Gaming Scams
The Philippine national police force has issued a warning to citizens about the risks of “cryptocurrency gaming schemes” and play-to-earn games. These schemes are often rife with scams due to the lack of compliance with anti-money laundering standards, increasing the risk of fraud. Scammers lure victims with fake rewards on fraudulent gaming apps, establishing trust before directing them to a game where they can supposedly earn crypto. In reality, the rewards are fake, and the money deposited by players is stolen through covertly activated malware. The police department did not provide statistics on the number of victims. The statement also highlights the market volatility of in-game tokens and economic barriers to entry.
Axie Infinity and Vulnerabilities in Crypto Gaming
The Philippine police specifically mentioned Axie Infinity as an example, emphasizing that it is not a scam but susceptible to market challenges. Filipino players faced financial devastation when relying on the game for income, accounting for 40% of its player base at one point. Axie Infinity experienced a major hack last year, losing $622 million in user funds. Although the funds were returned, the game’s active player count significantly decreased. The price of its in-game token, SLP, also experienced a sharp decline. Crypto gaming scams are not exclusive to the Philippines, with other games like CryptoZoo on the Binance Smart Chain also facing allegations of being scams.
Hot Take: Proceed with Caution in the Crypto Gaming Space
Crypto gaming presents opportunities for players to earn cryptocurrency, but it also comes with significant risks. The lack of regulation and compliance standards makes it a breeding ground for scams, putting players’ money at risk. While games like Axie Infinity have demonstrated the potential for income generation, they are not immune to market volatility and security breaches. As the popularity of crypto gaming continues to rise, players must exercise caution, conduct thorough research, and be mindful of potential scams.
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