The anti-cybercrime group of the Philippine National Police released a warning note to citizens on possible risks involved in cryptocurrency gaming schemes such as the play-to-earn model used by Axie Infinity.
The cautionary report said that the decentralized nature of crypto gaming leaves higher risks than investing directly in cryptocurrencies like Bitcoin (BTC) and Ether (ETH).
This is because “operators do not usually have to comply with certain standards, such as anti-money laundering, which can increase the risk of fraud,” the notice read.
“There is also the risk of losing your tokens and NFTs. This can happen when you try to send them to a wallet that does not support the NFT type or if you fall victim to a scam.”
Furthermore, the Filipino ACG warned that crypto game tokens are susceptible to price changes, just like cryptos, and some even restrict the withdrawal of tokens.
Beware of ‘Play-to-Earn’
The notice cautioned citizens about the play-to-earn scheme, where players can supposedly earn cryptos for engaging in regular gaming activities. Such rewards can often be fake.
For instance, the note highlighted the play-to-earn model used by Axie Infinity, a metaverse game created on the Ethereum blockchain. Users can buy Axie characters, level them up and sell those at a higher price.
Furthermore, potential players must acquire at least three Axie characters before playing the game, it stated.
“The lowest-priced Axies cost around the $100 mark, which means you must spend at least $300 before you can start earning. This high level of investment can put off the average player, as most traditional games do not cost more than $100.”
The notice although did not accuse Axie of fraud, said that its business model is vulnerable to the risks that the overall crypto market is facing.
The cybercriminals pretend to be legit and lure victims to an online or mobile game after building a rapport over time. These mobile games, though look real, are “designed to display fake rewards” which get accumulated as victims continue to play.
“However, when they stop depositing virtual money into the wallet, the cybercriminals steal all the funds via malware which was covertly activated when the victim joined the game,” the police group said.
The ACG also advised people to thoroughly conduct research on cryptocurrency before investing in them, be vigilant of fraudulent individuals and links shared by them, and select a proper legitimate and licensed exchange to avoid falling victim to such crypto gaming scams.
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