New Zealand’s financial regulator has issued a warning to local cryptocurrency investors and traders amid the recent bitcoin’s price action. The Financial Markets Authority (FMA) is asking people to remain cautious because cryptos are “high-risk, highly volatile assets.”
FMA Warns About Unregulated Overseas Crypto Exchanges
According to an official statement published in the NZ Herald, New Zealand financial watchdog is concerned about bitcoin’s latest ‘rollercoaster movement’ (BTC) price. “Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers,” said an FMA spokesperson.
But the regulator’s warning isn’t the only one seen in recent days. In fact, the FMA quoted its UK counterpart, the Financial Conduct Authority (FCA), said:
The FMA shares the FCA’s concerns that some crypto exchanges promise high returns and that clients should be willing to lose all their money.
The advisory contains a warning about unregulated foreign crypto exchanges. According to the FMA spokesman, exchanges without a connection to New Zealand make it “difficult to find out who is offering, trading, buying or selling cryptos”.
The Saga of Cryptopia
The watchdog has issued a reminder when dealing with a crypto exchange, stating:
You should also check if the exchange has your New Zealand dollars in a trust account.
The FMA said locals should ensure the exchange is registered in the Register of Financial Services Providers (FSPR). That’s a requirement to access a “dispute resolution scheme,” he added.
NZ Herald’s article also refers to the heist of Cryptopia – a Christchurch-based crypto exchange that underwent a major hack in January 2019. That year the Cryptopia team has estimated they lost nearly 9.5% of their total holdings, and the article noted that “crypto deposits are not guaranteed”.
What do you think of the FMA’s crypto warning? Let us know in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons