Imagine you are chilling over coffee with your co-workers in a break room. The deadline for the launch of your newest product is imminent and you are discussing last-minute design modifications. Digital images of the product float by as your AI assistant suggests the best potential design modifications. Together, you and your team choose the final product design and are ready for the next step in the launch. Virtual high fives ensue. You tease your co-worker, Megan, about taking so many virtual notes since that’s something your AI assistant does. Megan just laughs and says she has always been an inveterate note-taker.
With the meeting over, you tap your virtual glasses and presto, you are back in your home office. In fact, you never left it, as all the interactions happened in the metaverse. A few days later, you find out that a rival company is offering exactly the same product that you were planning to launch next month. Turns out that the avatar of your co-worker Megan was hacked and the person in the virtual office was a cybercriminal, not your real colleague. She sold your insider information to a competitor.
Many brands see exciting opportunities in the metaverse. They are embarking on a journey to create an immersive and virtual world to delight their customers and increase revenues. Metaverses have exploded over the last few years, attracting threat actors who flock to these digital environments to exploit vulnerabilities.
While the digital environment makes it easy to communicate and perform transactions between participants who are not physically in one space, it also creates new attack vectors and security challenges. In this new era, we anticipate that some old threats will migrate to the virtual worlds and that we will encounter new threats that are unique to the metaverse.
Even though there is no uniform definition of the metaverse, we can describe it as an extension of our real world into a virtual universe, where communication and operations happen using virtual reality (VR) and augmented reality (AR) tools. Its digital economy is powered by digital currencies and cryptocurrencies.
The novel Ready Player One and its film version clearly portray how a metaverse can look and operate. Players escape a dreary dystopian real world and can be anyone in the virtual environment. There is no single metaverse today. We should expect multiple metaverses created by various platforms and brands that will blend real-world activities with digital experiences.
Analysis from Bloomberg Intelligence shows that by 2024, the metaverse could represent nearly an $800 billion market opportunity. Gartner predicts that by 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social media, or entertainment.
In his “Building the Metaverse” blogs, Jon Radoff describes a complex digital environment that includes seven layers. There are at least 160 companies currently building a metaverse across these layers, including Microsoft, Apple and NVIDIA. While Roblox, Epic Games’ Fortnite, and Meta’s Horizon Worlds might be early leaders in the metaverse race, there is still enough space and time for other brands to capitalize on the opportunities.
Since first taking hold in the gaming industry, metaverse developments have expanded to other areas, including real estate, entertainment and the financial industry.
Fortnite brought live music concerts, featuring superstars Travis Scott, Ariana Grande, and Billie Eilish, into the metaverse. Iconic brands like Nike and Gucci have generated $260 million worth of sales from nonfungible tokens (NFTs) and have ambitions to expand their NFTs in the virtual world. Mastercard, American Express, and Visa have jumped into the metaverse space with a series of patents.
Visa Consulting advised financial institutions to view the metaverse as an opportunity for building new financial products and services for targeting younger consumers.
Metaverse Cyber Risks
With financial transactions moving to the metaverse, the virtual world becomes a hot target for cybercrime. The metaverse is still the early stages of developments so it is not yet regulated. There are no cyber cops to enforce laws. The lack of regulation makes it easier for criminals to operate without fear of retribution. Add to that the increase in data sharing between platforms to facilitate interactions and transactions in the virtual realm and you get a massive cyber attack surface ―aka the Promised Land for bad actors.
Here are some of the cybersecurity attack scenarios that are emerging in the metaverse:
1. Identity theft attacks
Remember that ‘co-worker’ Megan who sold insider information? A cybercriminal who gains control over your metaverse account and your virtual avatar can take fraud attacks to a new level. Given how quickly the world of work is evolving toward increasingly sophisticated remote work environments, this scenario could quickly shift from being a sci-fi movie plot to the real world.
A 20-minute virtual reality session with a VR headset produces 2 million data points about a user’s body language. The devices that collect this data can be used to validate transactions in the metaverse. If a cybercriminal gains access to this personal data, they could conceivably take over your account and impersonate you to perform illegal activities.
2. Bot and DDoS attacks explosion
In 2021, metaverse companies faced 80% more bot-driven attacks and 40% more human-driven attacks than other businesses.
In metaverse spaces, automated bots can impersonate legitimate users and take down entire virtual environments by overwhelming them with artificial digital traffic. Criminals can launch a DDoS attack to block access to virtual workspaces, shops, or event venues to commit a serious crime while the platform is down.
3. Increase in blockchain-related scams and threats to financial institutions and cyber attacks related to digital currencies.
Imagine a scenario where you purchase a beachfront property on Decentraland as an NFT. The purchase is recorded on a blockchain, making it seem quite secure. The transaction is publicly viewable. The token is stored in a digital wallet. One Friday night, ready to relax in your virtual property after a long week, you find you are locked out. The token has been stolen from your digital wallet. Involving law enforcement is difficult, as the criminal is from a different country.
Thefts from cryptocurrency wallets are on the rise. Millions of dollars were stolen from Solana Wallets and the blockchain project Ronin. Bad actors steal private keys to access crypto funds or create fake wallets and upload them to app stores to defraud unsuspecting users.
Securing Financial Transactions and Digital Assets in the Metaverse
To combat cybersecurity challenges and strengthen their defenses, metaverse companies need to adopt a zero-trust model that requires strict identity verification. Artificial intelligence tools combined with behavioral analytics will play a significant role in protecting immersive digital realms and the transactions that happen within them.
Solutions with unsupervised machine learning algorithms will help detect fraudulent or suspicious patterns that have not been previously seen. Combined with supervised machine learning models that automatically learn from labeled fraud cases and detect known threats, they will provide powerful protection for financial transactions in metaverse environments.
Metaverse cybersecurity education will be essential for employees and customers, as raising awareness about the risks might help to significantly reduce them.
As cyber attacks against cryptocurrency wallets become more frequent, customers who transact with companies in the metaverse must be able to trust that their metaverse transactions are as secure as their real-world fiat transactions.
Need help in protecting financial transactions in the metaverse environment? Get in touch with our experts.