Crypto Casino
Torrent Gear
Why metaverse requires legal regulation
Full story
The metaverse is not just a 3D world. It is a hybrid of platform and economy, where communications, digital goods, tokens, creatorship content, minigames, advertising, AR/VR devices, and sometimes betting/in-game gambling mechanics meet. Without a legal framework, such ecosystems risk turning into a "gray zone," where users, children, creators and honest businesses are the weakest protected. Regulation is needed not to inhibit innovation, but for transparency of rules, predictability of risks and sustainable growth.
1) Why regulation is necessary: 12 key reasons
1. Rights of users and children. Age-gating, informed consent, protection against manipulative mechanics, transparent rules for moderation and appeals.
2. Personal data and biometrics. VR/ARs capture body/gaze/voice telemetry; need strict rules for collection, storage, sharing, and disposal.
3. Digital property and IP. Protecting the rights of creators, licensing assets, combating plagiarism, understandable royalties and UGC conditions.
4. Payments and virtual assets. Returns, chargeback, consumer protection, AML/KYC rules, and tokenized value labeling.
5. Tokens, loyalty and financial models. The line between utilitarian tokens and investment products; banning misleading yield promises.
6. Advertising and promo. Explicit labeling, non-abuse targeting, age/geo restrictions, influencer and loot box rules.
7. Content moderation and security. Politicians against toxicity, harassment, CSAM, hate speech; requirements for AI moderation and solution logs.
8. Cybersecurity and anti-fraud. Mandatory standards for protecting accounts/payments, notifications of hacks, measures against bots and "farms" of accounts.
9. Competition and non-discrimination. Inadmissibility of "self-preference" of the platform, fair access to shop windows, prohibition of imposing unfavorable conditions on creators.
10. Labor and economics of creators. Transparent payments, taxes, terms of arbitration of disputes, protection against sudden demonetization.
11. Jurisdiction and applicable law. Boundary disputes and conflicts of laws: an understandable mechanism is needed to determine the applicable law and the place of resolution of the dispute.
12. Accessibility and inclusion. UX requirements for people with special needs (fonts, subtitles, secure visual intensity).
2) What exactly should be regulated
2. 1. Account and identification
Age verification (without unnecessary data collection), prohibition of targeting 18- for sensitive categories.
Mandatory appeal channels, data portability, right to delete.
2. 2. Economics and payments
Returns and cooling rules for digital purchases.
Transparent commissions, a list of risks when buying tokenized assets.
AML/KYC for Value Turnover and Secondary Markets.
2. 3. Content and IP
Notification and "quick track" removal of counterfeit.
Rules for the use of brands/music/face images.
Licenses for creators and predictable royalties.
2. 4. Moderation and algorithms
Clear community standards, described sanctions and storage periods for moderation logs.
Requirements for transparency and contestability of automated solutions (AI filters, downranking, shadow-ban).
Mandatory reports on the risks and effectiveness of moderation.
2. 5. Advertising and promo
Labeling of advertising surfaces in 3D, requirements for influencers.
Restrictions on "manipulative" UX patterns (dark patterns involving children).
2. 6. Safety and sustainability
Minimum encryption standards, MFA/2FA, update policy.
Breach and incident notification obligations; response plans.
Load/safe tests before large events.
3) Regulatory models: How not to stifle innovation
Principle-oriented model. Fewer "hard" rules, more principles (transparency, security, data minimization) - followed by detailing in codes of practice.
Risk-based model. The scope of claims depends on risk (age audience, value turnover, health/financial impact).
Sandboxes. Temporary regulatory regimes for pilots with simplified reporting and close supervision.
Co-regulation. Self-regulatory codes + external auditors + government oversight (especially for moderation and algorithms).
Algorithmic responsibility. Mandatory AI-risk assessments, decision logs, independent audit slices and the possibility of external investigation.
4) Tools for regulators
Platform/Operator Registry. Basic information, contact for incidents, hosting country.
Risk reporting. Periodic reports on moderation, toxicity, complaints, hacking, childhood incidents.
Technical audits and inspections. Verification of data storage, anti-fraud systems, AI filters and response protocols.
"Button" for emergencies. Procedure for the rapid restriction of hazardous spaces (e.g. for life/health threats).
International coordination. Joint investigations, unification of data requirements and child protection.
5) What is important to the metaverse operator (compliance checklist)
1. Politicians: Age, moderation, complaints/appeals, returns, advertising, UGC/IP.
2. Data: PII/biometrics flow maps, minimization, encryption, retention, DPIA/PIA.
3. AML/KYC: risk segmentation of users and providers, sanctions lists, transaction monitoring.
4. Algorithms: documentation of moderation/recommendation models, explainability, off-switch and folbacks.
5. Security: Default MFA, bugbounty, incident playbooks, redundancy.
6. Content and IP: DSA-like "notice-and-action," verification of copyright holders, deletion logs.
7. Children: individual UX patterns, prohibition of sensitive advertising and "loot box pressure," enhanced moderation.
8. Contracts: clear offers, geo localization, described risks of tokens/virtual goods.
9. Reporting: safety and trust metrics (including for partners/brands).
10. Internal control: DPO/compliance officer, team training, regular audits.
6) Metaverse and gambling: special accents
Geo-limitations and age. "Entry" into gambling activities only through licensed circuits and proven gateways.
RNG/integrity. Certification of providers, public rules "provably fair" for on-chain mechanics.
Responsible play. Limits, "breaks," self-exclusion, understandable warnings about risks.
Marketing. Prohibition of "children's" target, promo labeling, transparency of bonuses.
Payments. Suppliers with KYC/AML, chargeback protection, returns policy.
7) Jurisdictions, Disputes and Enforcement
Applicable law. Record in user agreements where and how disputes are resolved (with caution for consumers).
Arbitration/Ombudsman. Rapid extrajudicial mechanisms for creators/users.
Recognition of solutions. Cross-border enforcement mechanisms (especially for monetary claims and IP).
Traceability. Admin action logs, chain of custody of evidence.
8) Roadmap for lawmakers and regulators
0-6 months:- Risk classification, term base, reporting and incident reporting requirements.
- Sandboxes for token utilities and creator monetization models.
- Codes of moderation and advertising practices, standards for children's spaces.
- Algorithmic responsibility: risk reports, audits, decision logs.
- Cross-country data/child protection/AML agreements.
- Minimum technical security standards (MFA, encryption, response).
9) User rights and tools
The right to know: what data is collected and why; how recommendations/moderation work.
The right to object: to targeting, profiling, processing sensitive data.
Right to transfer/delete: export assets/content, closing an account without "hostage."
Right to appeal: Transparent and swift procedures to review sanctions.
Default security: MFA, risk alerts, support hotline.
10) Critical facet: regulate as an environment, not "kill" creative
The task is to make metaspace predictable and safe, while preserving the freedom of creativity and business. The best way is a risk-oriented and co-regulated model: clear principles, transparency of algorithms, audit and understandable user rights. It reduces toxicity and fraud, boosts brand and investor confidence and accelerates industry maturity.
Metaverse become "cities" with their own market, media and labor - and like any city, they need a constitution of rules. Legal regulation is the foundation of transparency, security and long-term growth: it protects people, makes business predictable and innovation scalable. The sooner ecosystems embed these principles into architecture, the faster the metaverse will cease to be an experiment and become a sustainable part of the digital economy.