Crypto investors have pumped hundreds of millions of dollars into buying up virtual land – and thieves are taking note. According to Joseph Borg, a financial regulator in Alabama, metaverse real estate scammers pose a danger to investors in his home state.

“There are offers for [metaverse] real estate [scams] where they’ll tell you, ‘Get in now while it's hot before the price goes up,’ and everybody buys it and you're left out,’” said Borg, the longtime director of the Alabama Securities Commission. “I put that right up there next to the one that's selling real estate on the moon.”

Indeed, the crypto-verse has a potpourri of “metaverses” from Yuga Labs’ Bored Ape-themed Otherside realm (over $800 million in lifetime land sales) to Decentraland ($330 million), The Sandbox ($295 million) and more. One dashboard on crypto data site Dune counts the top 32 virtual worlds.

That’s not to say these land sales are inherently fraudulent. Speculators aside, some investors see value in buying a piece of digital real estate and then building their virtual worlds atop their plot. Decentraland is full of otherworldly architecture and virtual shtick.

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But some of those builders are allegedly fraudulent. In May, Borg’s ASC and four other state-level financial regulators ordered a metaverse casino with alleged Russian connections to cease sales of non-fungible tokens (NFTs). The regulators claimed the casino, called the Flamingo Casino Club, was a front for scammers.

Actually locking up the alleged scammers is another matter.

In order to stick it to the scammers, regulators must first identify them, Borg told CoinDesk. But doing so can be tough in the metaverse, where fraudsters can cloak themselves in the veil of internet anonymity, which these days means masquerading in sometimes zany ways, Borg said.

“Saying [we're going to] issue an order against the guy who looks like a duck with a hat on in the metaverse doesn't do us any good,” Borg said. “We got to track down a computer, trace it and figure out where their money's going and how they're operating.”

In the absence of identifiable persons of interest, and left with little legal recourse as a result, the ASC has issued an advisory cautioning people about the dangers of investing in potential metaverse scams.

That doesn’t mean the commission, which has muscled crypto’s bad actors before, has given up on tracking criminals, however. Borg said ASC is still gunning to put a lid on metaverse real estate scams and hopes to issue orders against those involved in the scams once they can be identified.

Read more: Alabama: The Unlikely Frontline for America's Crypto Fraud Crackdown

And while those efforts are underway, the commission is taking steps to educate would-be investors about how the metaverse really works.

“It’s ‘get into the real estate market now because everybody's going to want a piece,’” Borg said. “But, of course, you can create as much [real estate] as you want, because you can have a multitude of metaverses, but people don't understand that yet.”

The Flamingo Club Casino case, and many like it, Borg says, demonstrates how the metaverse can be not only a land of opportunity, but also a land of large losses, especially for the uninformed investor.

“Bad actors are now leveraging interest in [metaverse] opportunities and products,” Borg said in a press release Wednesday. “Virtual reality can leave you virtually broke.”

Read more: Metaverse Real Estate – Next Big Thing or Next Big Boondoggle?