The New Zealand Financial Regulator issued a warning to local cryptocurrency investors and traders who were caught in the recent Bitcoin price movement. The Financial Markets Authority (FMA) urges people to remain cautious as cryptos are “high risk and very volatile assets”.
FMA warns of unregulated crypto exchanges overseas
According to an official statement published in the NZ HeraldThe New Zealand financial watchdog is concerned about the recent “roller coaster train” in Bitcoin (BTC) Price. “Cryptocurrencies are not regulated in New Zealand and are often exploited by fraudsters and hackers,” said an FMA spokesman.
The regulator’s warning isn’t the only one seen in the past few days, however. Indeed the FMA quoted its UK counterpart, the Financial Conduct Authority (FCA), said:
The FMA shares the FCA’s concern that some crypto exchanges promise high returns and customers should be willing to lose all of their money.
The advisory includes a warning about unregulated overseas crypto exchanges. According to the FMA spokesman, on exchanges with no connection to New Zealand it is “difficult to find out who is offering, exchanging, buying or selling cryptos”.
The saga of cryptopia
The watchdog recalled this when dealing with a crypto exchange:
You should also check that the exchange is holding your New Zealand dollars in escrow.
The FMA said locals need to make sure the exchange is registered on the Financial Service Providers Register (FSPR). This is a prerequisite for access to a “dispute settlement scheme”.
The NZ Herald article also references Cryptopia’s raid – a Christchurch-based crypto exchange that suffered a major hack in January 2019. That year, the Cryptopia team estimated that they lost nearly 9.5% of their total holdings and the article stated that “Crypto Deposits Are Not Guaranteed.”
What do you think of the FMA’s crypto warning? Let us know in the comments below.
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