The BSP warned against NFTs anew.
BSP — The Bangko Sentral ng Pilipinas has again flagged the risks of NFTs (non-fungible tokens) and reminded the public that they should be aware of how play-to-earn games work.
Following the theft of USD 600 million worth of digital tokens from a digital ledger used by players of the popular NFT game Axie Infinity, the central bank has again flagged the risks of NFTs.
“We have been reminding the public that they should be aware of how these games work, the risks attended to them, and they should for example know how they can have recourse or remedies,” BSP Payment System Oversight Department Deputy Director Bridget Rose Mesina-Romero said in a virtual briefing on Thursday. “They should only place funds that they are willing to lose because of the risks.”
The central bank’s reminder came after the Ronin Network — used by Axie Infinity as its digital ledger — said that hackers amassed 173,600 ETH (Ether) and USD 25.5-million worth of USD Coins, equivalent to USD 615 million as of Tuesday but worth USD 540 million at the time of the attack.
According to Sky Mavis, they were made aware of the security breach last Tuesday, after Ronin said that hackers gained access to private keys in order to withdraw digital funds.
GMA News Online reported that about 35 percent of traffic in Axie Infinity came from the Philippines, accounting for the biggest share of its 2.5 million daily active users.
The central bank earlier said that it is monitoring transactions involving Axie Infinity’s SLPs (small love potions), which play-to-earn gamers can either cash out or use to breed new Axies (digital pets).
Also, the central bank has earlier noted that SLPs are excluded from its scope under the guidelines for VASPs (Virtual Asset Service Providers) as its regulatory focus is on the exchange of fiat money for virtual assets.
Sky Mavis is not registered as an OPS (operator of payment systems), and the central bank said that it is in coordination with other regulators to determine whether the company should fall under such a category.
BSP Governor Benjamin Diokno, in the same briefing, reiterated the volatility that comes with digital tokens.
“We wish to emphasize that there are risks associated with NFTs such as price volatility which may result to significant financial losses, and also other types of risks relating to cyber fraud and scams,” Diokno said. “As such, we would like to remind the public to transact only with BSP-registered entities.”