Privacy and ethical issues in social interactions in virtual communities in the Metaverse become crucial because the Metaverse facilitates the collection of very detailed data about users. This study aims to identify the privacy challenges faced by users in virtual communities in the Metaverse and analyze the ethical implications of social interactions. This study uses a quantitative approach with a population of Metaverse users in Indonesia involving 400 respondents selected through purposive sampling techniques. Data collection was carried out through a structured online questionnaire and analyzed using Structural Equation Modeling (SEM). The results show that privacy policies and data security arrangements significantly increase user satisfaction with privacy, while ethical regulations play an important role in shaping user perceptions of social interaction ethics, which contributes to a decrease in the frequency of privacy violations. The interaction between ethical perceptions and privacy policies also significantly moderates the relationship with privacy violations. This suggests that effective implementation of privacy policies, optimal data security arrangements, and strong ethical regulations can create a safe and trustworthy digital environment. It is therefore suggested that companies and policymakers can strengthen regulations related to privacy and data security and educate users about social interaction ethics to reduce privacy violations.