The distinction between legitimate metaverse event platforms and misleading crypto and NFT schemes is getting harder to discern, a troubling development for the event industry.
The industry is certainly not exempt from this 21st century version of the gold rush, complete with a land-grab in the virtual reality space of the metaverse.
Why should the event industry be concerned? It is becoming increasingly difficult to separate legitimate, established VR platforms from those with highly exaggerated (or wholly falsified) capabilities.
Contributing to the lack of transparency, the press is too often quick to parrot the claims of these crypto-funded metaverse startups.
Indeed, blockchain analytics firm Chainalysis reported that fraudsters took in a record $14 billion worth of cryptocurrency last year — primarily through “DeFi” or “decentralized finance”, an umbrella term that includes decentralized exchange platform (DEXs) like Genesis Pool.
EventMB talked to more than nine sources about this alarming trend, and several suspicious operations came to light.
Some cryptoassets have provided eye-poppingly high short-term returns for investors, and they may even turn out to be sound in the long run. Nevertheless, it’s important to consider each end of the spectrum when evaluating any given crypto project.
A Concert Metaverse Platform That Vanished
There was, for example, a startup called Hyperverse that marketed itself as a concert platform. It first garnered attention when multiple media outlets reprinted its press release about the platform’s inaugural concert by R&B singer Jacquees. Publications that covered the story included XLIVE, The Blockchain Examiner, App Developer Magazine, and New York Style Guide among others.
Apart from XLIVE, all of these publications republished an unedited version of the startup’s press release, which opened with the following grandiose statement: “Launching on December 15th, an exclusive concert featuring King of the Metaverse himself, Jacquees, will perform to kick off the new Hyperverse, never seen before digital music platform that brings musicians and fans together. The Hyperverse is the only cohesive platform for musicians to stream metaverse concerts, sell NFTs, tokenize their careers, and design digital merchandise.”
Despite the press release announcing that the NFT tickets would allow fans to access the “metaverse” concert repeatedly, there is no discernible trace of the metaverse platform that was supposed to have hosted this concert. The Hyperverse website is no longer active, although a February entry on Wayback Machine shows a familiar logo, and there is no way of confirming if a metaverse concert took place at all.
A Metaverse Platform Accused of Fraud
There is also a seemingly separate HyperVerse “virtual metaverse” platform. It has a much larger social media presence than its concert-focused counterpart, and a search of “HyperVerse scam” on Twitter digs up accusatory tweets directed at now defunct handles like @hyperverse (suspended by Twitter).
HyperVerse has a slick website and received a glowing endorsement from former NSYNC member Lance Bass. A video “trailer” video provides a preview of the HyperVerse VR platform which offers a futuristic rendering of an alternative world, but offers no insight into how the interactive HyperVerse metaverse actually functions.
Several publications have scrutinized the HyperVerse business model and its leadership. Both a report by The Financial Review Australia and an exposé by investigative journalist Andrew Penman focus on the shady dealings of some of the people behind the HyperVerse. Behind MLM reveals the company’s evolution from HyperTech, to HyperFund, and now to HyperVerse.
As of the writing of this article, the HyperVerse token is down almost 88 percent from its all-time high trading value. At the same time, HyperVerse is promising new investors a 400 percent ROI in HU (Hyper Units), which are virtually impossible to withdraw at the promised rate.
HyperVerse officials were unavailable for comment.
More Crypto Regulation May Be Coming
Although centralized crypto exchanges are currently subject to some regulatory oversight, its scope is primarily limited to preventing money laundering and the financing of terrorist activities. If the Biden Administration’s March 9 Executive Order is any indication, much more broad-sweeping regulations are likely to come soon.
In the U.K., the Financial Conduct Authority (FCA) warns that under current regulations, consumers are unlikely to have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) “if something goes wrong.” To that end, it FCA states, “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money. If consumers invest in these types of product, they should be prepared to lose all their money.”
Until further regulations are enforced, crypto investors would be wise to do thorough research before buying into a project, particularly if it seems to be latching onto the next big trend.