The Philippine National Police’s anti-cybercrime division recently released a statement cautioning the public about potential pitfalls associated with cryptocurrency-based gaming platforms, particularly the “play-to-earn” variety.
The Underlying Concerns
There’s a growing concern that this sector is a breeding ground for fraudulent activities. The lack of stringent regulations, especially pertaining to anti-money laundering measures, has amplified the risk of deception.
One of the methods scammers employ is enticing potential victims with fabricated rewards through tailor-made gaming applications. After gaining the trust of the victims, they are directed towards an online platform where they are promised cryptocurrency rewards in exchange for regular gameplay. However, instead of gaining rewards, many unsuspecting players find their investments siphoned off via concealed malware activated upon joining these platforms.
When efforts were made to obtain data from the Philippine police regarding the number of individuals defrauded by these crypto gaming schemes, there was no immediate feedback.
The advisory also shed light on other potential financial risks. It emphasized the unpredictability of the in-game tokens’ market value, and the prohibitive costs involved before gamers can start playing in some cases.
A Closer Look at Axie Infinity
Interestingly, Axie Infinity by Sky Mavis was spotlighted in the warning, although the game wasn’t tagged as a fraudulent scheme. This mention isn’t random; Axie Infinity has a significant player base in the Philippines. According to a report by Time, Filipino players made up approximately 40% of the total players at one juncture.
While the game’s authenticity isn’t in question, it’s prone to challenges familiar to the broader crypto ecosystem. For instance, in the previous year, Axie Infinity experienced one of the most significant security breaches ever recorded, resulting in a loss of $622 million. This incident, combined with other market factors, dramatically reduced the game’s active player base and the value of its in-game token, SLP.
International Concerns: A Glimpse at CryptoZoo
The allure of crypto gaming isn’t restricted to the Philippines. One notable instance is CryptoZoo on the Binance Smart Chain, launched in 2021. The game has been surrounded by controversy, with several alleging it to be a scam.
Earlier this year, a popular YouTuber, Coffeezilla, raised accusations against Logan Paul, the creator of CryptoZoo, after discussions with multiple individuals who reportedly lost significant sums due to their CryptoZoo NFT investments. This led to a series of public exchanges between the two, culminating in Paul’s pledge to reimburse buyers. However, this refund has remained elusive.
Concluding Thoughts
With the burgeoning growth of crypto gaming platforms, it’s crucial for players to tread carefully and be well-informed to avoid potential pitfalls. As always, due diligence is paramount before diving into any investment opportunity.
