The Philippine National Police’s anti-cybercrime group has issued a warning to citizens regarding the potential risks associated with cryptocurrency gaming schemes, specifically mentioning the popular play-to-earn model used by Axie Infinity. In a cautionary report, the group highlighted the decentralized nature of crypto gaming, which poses higher risks compared to direct investments in cryptocurrencies like Bitcoin and Ether.
The report emphasized that operators of crypto gaming platforms typically do not comply with certain standards, such as anti-money laundering measures, which increases the risk of fraud. Additionally, the decentralized nature of these platforms leaves users vulnerable to losing their tokens and non-fungible tokens (NFTs) when attempting to send them to unsupported wallets or falling victim to scams.
The report also warned about the volatility of crypto game tokens, noting that their prices can fluctuate similar to cryptocurrencies, and some platforms restrict the withdrawal of tokens.
Of particular concern to the Philippine National Police is the play-to-earn scheme, where players supposedly earn cryptocurrencies by participating in regular gaming activities. The report cautioned that these rewards can often be fake and cited Axie Infinity as an example.
Axie Infinity is a metaverse game built on the Ethereum blockchain that allows users to purchase Axie characters, level them up, and sell them at a higher price. However, potential players must acquire at least three Axie characters before starting the game, which can cost around $300. The report noted that this high level of investment may deter average players, as most traditional games do not require such significant upfront costs.
The report did not directly accuse Axie Infinity of fraud but highlighted that its business model is susceptible to the risks faced by the overall crypto market.
The Philippine National Police’s anti-cybercrime group also warned about cybercriminals who pretend to be legitimate and entice victims to online or mobile games. These games, albeit appearing authentic, are designed to display fake rewards. Once victims stop depositing virtual money into their wallets, cybercriminals activate malware to steal all the funds. The group advised individuals to thoroughly research cryptocurrencies, remain vigilant of fraudulent individuals and links, and choose legitimate and licensed exchanges to avoid falling victim to crypto gaming scams.
