Building a Responsible Metaverse Figure 2 Key Takeaway Companies must decipher what is real and what is hype before engaging with digital assets. Before jumping into the “web3” movement, companies should explore the full range of options, including enterprise-grade platforms and Operational risk Financial risk Legal risk Reputational risk solutions. Whether you are just beginning • Limitations in ensuring data confidentiality • High “gas” fees to transact on certain • Legal and regulatory frameworks • Airdrops of inappropriate or illegal content or expanding your tokenization and data segregation blockchains applicable to digital assets and those who provide services related to them are • Questionable neighbors in virtual worlds journey, start by identifying your • Data corruption or total loss of • Extreme market volatility with respect to currently uncertain strategic objectives, defining what data resulting from failed processes / the value of a specific digital asset • Unverified identities of customers systems or from compromised • Challenges in complying with data your target audience truly values, digital wallets • Unverified identities of customers protection regulations such as GDPR and • Poor user experience and selecting trusted technology CCPA • Security vulnerabilities or loss of • Concerns over fraud, theft and market • Concerns over environmental, solutions and service providers that functionality resulting from unanticipated manipulation • IP infringement, ownership and licensing sustainability and the widening digital address concerns around privacy, changes to a blockchain network (forks) issues may arise with digital assets, divide • Difficulty integrating with third-party especially digital media security and safety. • Unclear governance of the network, payment processors or traditional fiat on/ • Concerns over misuse of personal data, including activities such as business off-ramps • Concerns over being held liable for fraud and theft continuity planning and continuous unknowingly participating in money improvement • Probabilistic settlement finality leading to laundering, sanctions violations or other unclear transaction completion fraudulent behaviors • Unpredictable software releases from opaque open-source governance • Lack of recourse and possible processes indemnification • Conduct that is considered deceptive or unfair and leads to legal penalties • Potential for larger risk exposure given secondary markets for some digital assets 12