As virtual worlds become more immersive and mainstream, cybercriminals are finding creative ways to steal personal and financial information. From deepfake impersonations to phishing scams and digital asset theft, the metaverse is ripe for exploitation. Here’s what to watch out for and how to stay safe as you explore these rapidly expanding digital environments.
The metaverse isn’t some far-off, futuristic concept anymore—it’s already here. Millions of people are socializing, shopping, and doing business in virtual worlds like Decentraland, Roblox, and Meta Horizon Worlds.
But as these digital spaces grow, so do the risks.
For instance, in early 2022, scammers created a fake version of the popular metaverse platform "The Sandbox" and tricked users into connecting their crypto wallets on this fraudulent site (which looked nearly identical to the real one). Once users connected their wallets, the scammers were able to steal their cryptocurrencies and NFTs.
And that's just one example of how cybercriminals are targeting metaverse users. From phishing schemes to fake platforms, they’re finding creative ways to steal your personal information and digital assets.
Common metaverse scams and security threats
As the metaverse expands, so do the opportunities for cybercriminals to strike. But if you know the most common scams and threats in virtual worlds, you’ll have a leg up.
Deepfake impersonations: Scammers are using advanced AI-generated deepfakes to impersonate trusted figures. Using hyper-realistic avatars or video calls to pose as company executives, friends, or influencers, they may pressure you to transfer money, give up login credentials, or invest in bogus ventures.
Phishing in virtual spaces: Just like in traditional online spaces, phishing scams are rampant in the metaverse. Fraudsters might send fake messages within the platform or direct you to bogus websites designed to capture your personal information or wallet keys.
Digital asset theft: Cybercriminals target crypto wallets and NFTs, often by exploiting platform vulnerabilities in a platform’s security system, stealing credentials, or luring you into sharing private keys. Once assets are gone, recovery is often difficult or impossible.
Fake marketplaces and projects: The promise of limited-edition digital goods or investment opportunities can entice you into transferring funds to scammers posing as legitimate creators or companies. But once the scammer receives your money or assets, they vanish.
Metaverse security by the numbers
Phishing scams in the metaverse are hard to track, but experts say they’re on the rise and getting more sophisticated by the day.
Cyber fraud against businesses rose 14 percent in 2024, fueled in part by the growing use of generative AI to create convincing deepfakes, according to the American Bankers Association.
The average American encounters 2.6 deepfake videos daily and over 500,000 deepfakes circulated on social media in 2023 alone, according to a report by McAfee.
Two out of three respondents reported encountering malicious deepfakes used as part of an attack in 2022, marking a 13 percent increase from the previous year, according to a VMware report.
Signs you might be facing a scam in the metaverse
Not every virtual interaction is what it appears to be. Spotting a scam in the metaverse often means picking up on small clues, just like you would in real life.
High-pressure tactics: If someone pushes you to act fast (whether it’s to buy now, invest quickly, or share your credentials immediately), that’s a major red flag.
Requests for sensitive information: No legitimate project or company will ever ask for your private wallet keys, Social Security number, or passwords in direct messages or in-world chats.
Inconsistencies or glitches: Look out for avatars, websites, or virtual events that seem off. Poor-quality graphics, suspicious URLs, and strange behavior (such as glitches in avatars’ facial expressions) may indicate a scam or deepfake.
Too-good-to-be-true offers: If a deal or investment promises guaranteed returns, exclusive access with no verification, or unrealistically low prices for valuable NFTs, approach with caution.
How to protect your identity in the metaverse
The good news? You don’t have to avoid the metaverse to stay safe.
A few precautions can go a long way in protecting your personal information, digital assets, and overall peace of mind as you explore virtual spaces.
Use secure platforms and tools. Stick to well-known and vetted metaverse platforms and marketplaces. Always enable multi-factor authentication (MFA) and use reputable crypto wallets with built-in security features.
Keep personal information private. Limit the amount of personal information you share in virtual spaces. Be mindful of how much you reveal in chats, profiles, or transactions.
Verify before you trust. If someone claims to represent a brand, project, or influencer, verify their identity via official websites or social media before engaging or transacting.
Watch for phishing. Avoid clicking links shared through direct messages or public chatrooms. If you receive an unexpected message with a link—even from a familiar avatar—verify its legitimacy elsewhere.
What to do if you’ve been targeted in a metaverse scam
Even experienced users can fall victim to the increasingly sophisticated scams unfolding in the metaverse. If you think you've been targeted or compromised, fast action is key.
Start by cutting off all communication with the suspected scammer and blocking them within the virtual platform. Then, report the incident directly to the platform. Most metaverse environments have tools in place to flag abuse or fraudulent behavior. (It’s also important to file a report with the FTC at ReportFraud.ftc.gov, and if you’ve experienced financial loss, notify the FBI’s Internet Crime Complaint Center at ic3.gov.)
Next, secure your connected accounts by updating passwords and enabling multi-factor authentication, especially on your email, crypto wallet, and metaverse profiles.
Continue monitoring your credit report and financial accounts, as scammers may attempt further fraud. If you're an Allstate Identity Protection member, our specialists can help guide you through recovery and protect your identity moving forward.
And remember: AI isn’t all bad news. While scammers are leveraging tools like deepfakes and chatbots to trick users, that same technology is also being used to make virtual spaces safer. As our physical and digital lives become more intertwined, protecting your personal information in virtual spaces is more important than ever. Stay alert, practice smart cyber habits, and act quickly if something doesn’t feel right.
