The New Zealand financial watchdog has given cryptocurrency investors a warning whistle following the recent drop in Bitcoin prices.
According to a report On Tuesday on the NZ Herald, the Financial Markets Authority (FMA) said New Zealanders considering buying cryptocurrencies need to be aware that they are “high-risk and highly volatile assets.”
“Cryptocurrencies are not regulated in New Zealand and are often exploited by fraudsters and hackers,” an FMA spokesman told the Herald.
The warning comes a day after its UK regulator’s counterpart, the Financial Conduct Authority (FCA), raised similar concerns. The FCA said people should be ready to lose “all their money” investing in crypto products that promise high returns.
“The FMA shares the FCA’s concern that some crypto exchanges promise high returns and that customers should be ready to lose all of their money,” the spokesman said.
Overseas cryptocurrency exchanges are “unregulated” and run entirely online, making it harder to track operators, the watchdog warned. Users should verify that an exchange is holding New Zealand dollars in escrow, they said.
As of December 1, the price of Bitcoin rose 124% from around $ 18,770 to record highs near $ 42,000 on Friday. The world’s largest cryptocurrency by market capitalization has fallen 18% since Sunday and is currently changing hands for around USD 35,150.