New Zealand’s Financial Markets Authority (FMA) has issued a warning against cryptocurrencies. The financial regulator mentioned that digital currencies are not currently regulated in the country. The FMA said that Bitcoin is a highly volatile asset, and New Zealanders should be aware of the risks associated with digital currencies. According to the NZ Herald report, the FMA expressed concerns regarding the rising crypto scams in the country as many unregulated crypto exchanges are promising high returns to the investors.
“Cryptocurrencies are not regulated in New Zealand .”
NZ Herald quoted an FMA spokesperson saying, “cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers. New Zealanders considering purchasing cryptocurrencies, such as Bitcoin, should be aware that these are high risk and highly volatile assets.” “The FMA shares the FCA’s concerns that some crypto platforms are promising high returns and customers should be prepared to lose all of their money. Many overseas crypto exchanges are unregulated and operate exclusively online, with no connection to New Zealand. This makes it hard to find out who is offering, exchanging, buying, or selling the cryptocurrencies,” the spokesman added.
Crypto scams also rise as bitcoin continues to gain mainstream exposure.
The crypto market gained substantial value in the last year or so. Bitcoin, the world’s largest cryptocurrency by market capitalization, jumped more than 300% in 2020. The overall market cap of cryptocurrencies now stands at around $950 billion. The recent jump in the prices of cryptocurrencies also caused a significant increase in crypto scams around the world. A recent report by the London-based crypto assets risk management solutions provider, Elliptic, revealed that criminals are using privacy wallets to hide stolen Bitcoin. Crypto regulations still remain in grey in most countries.
