This chapter addresses the legal challenges of the virtual world, with a particular emphasis on the role of identity in its new configurations in the contemporary virtual environment. Specifically, we consider the changing nature of regulation, law and crime in an online context that has seen the emergence of the metaverse, which has made connecting the physical with the virtual persona more complex. Avatars and other personae have made it challenging to align identity with prior understandings and perceptions. Digital personae and virtual representations of selves require theoretical reconsiderations of identity and a set of norms that regulate interaction, and human relations in general within this world. Indeed, a discussion on identity rationalizes the need for new laws. The chapter considers these emerging challenges and explores the role that democratic governments and other gatekeepers can play in regulating digital communication and discourse, balancing the protection of freedom of speech with the persecution of hate speech. The perceived state of lawlessness that inhabits the online space suggests the need for clear criteria and terms of use, in addition to establishing a mechanism of accountability for those involved in virtual crimes, due to the lack of governmental guidelines for crimes in virtual universes.