Financial Crimes in Web3-Empowered Metaverse: Taxonomy, Countermeasures, and Opportunities

Abstract

At present, the concept of metaverse has sparked widespread attention from the public to major industries. With the rapid development of blockchain and Web3 technologies, the decentralized metaverse ecology has attracted a large influx of users and capital. Due to the lack of industry standards and regulatory rules, the Web3-empowered metaverse ecosystem has witnessed a variety of financial crimes, such as scams, code exploit, wash trading, money laundering, and illegal services and shops. To this end, it is especially urgent and critical to summarize and classify the financial security threats on the Web3empowered metaverse in order to maintain the long-term healthy development of its ecology. In this paper, we first outline the background, foundation, and applications of the Web3 metaverse. Then, we provide a comprehensive overview and taxonomy of the security risks and financial crimes that have emerged since the development of the decentralized metaverse. For each financial crime, we focus on three issues: a) existing definitions, b) relevant cases and analysis, and c) existing academic research on this type of crime. Next, from the perspective of academic research and government policy, we summarize the current anti-crime measurements and technologies in the metaverse. Finally, we discuss the opportunities and challenges in behavioral mining and the potential regulation of financial activities in the metaverse. The overview of this paper is expected to help readers better understand the potential security threats in this emerging ecology, and to provide insights and references for financial crime fighting.

Blockchain Technology and Virtual Asset Accounting in the Metaverse: A Comprehensive Review of Future Directions

“…However, because the metaverse lacks regulations and standards, the expansion of virtual assets there has raised fresh risks and issues [28], [29]. It may be difficult to assess the real value of virtual assets because there are no regulations governing those [30].…”

“…It may be difficult to assess the real value of virtual assets because there are no regulations governing those [30]. In the metaverse, fraud and hacking are also big issues, and reports of virtual asset theft and fraud are growing increasingly common [29]. Furthermore, it could be challenging to predict future trends and investment opportunities because of the volatility of virtual asset values in the metaverse [24].…”

“…On the other hand, it is anticipated that current financial institutions will adapt and grow in order to include virtual assets in their services, creating new chances for growth and innovation [33]. The metaverse's ascent of virtual assets is still in its early stages, and as it does so, its effects on the world economy are likely to grow much more profound [29].…”

“…Traditional accounting practices have been disrupted by the incorporation of virtual assets into the metaverse, posing a new challenge for accountants [21]. The real worth of virtual assets and their financial impact on businesses are difficult to ascertain because of the lack of norms and regulations in the metaverse [29]. For financial reporting to remain accurate and transparent for investors and stakeholders, accounting for virtual assets in the metaverse is crucial [21], [5].…”

Mapping Metaverse Research: Identifying Future Research Areas Based on Bibliometric and Topic Modeling Techniques

“…Complementing this focus on decentralization are the concepts of Web3, privacy, and parallel intelligence [127][128][129]. As a decentralized iteration of the internet, Web3 emphasizes the importance of user autonomy and data privacy [130,131], thereby addressing concerns regarding centralization and surveillance. Concurrently, parallel intelligence has emerged as a crucial area of inquiry, encapsulating the intersection of AI and blockchain technology and fostering innovative and collaborative problem-solving approaches [129].…”