New Zealand’s financial regulator issued a warning alert to local cryptocurrency investors and traders amid the recent bitcoin’s price action. The Financial Markets Authority (FMA) asks people to remain cautious because cryptos are “high risk and highly volatile assets.”
FMA Warns About Unregulated Overseas Crypto Exchanges
According to an official statement published in the NZ Herald, New Zealand’s financial watchdog is concerned about the latest “rollercoaster move” seen in the bitcoin (BTC) price. “Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers,” said an FMA spokesman.
But the regulator’s warning is not the only one seen over the last few days. In fact, the FMA quoted its U.K. counterpart, the Financial Conduct Authority (FCA), as saying:
The FMA shares the FCA’s concerns that some crypto exchanges are promising high returns and customers should be prepared to lose all of their money.
The advisory includes a warning on unregulated overseas crypto exchanges. Per the FMA spokesman, exchanges with no connection to New Zealand make it “hard to find out who is offering, exchanging, buying or selling” cryptos.
The Cryptopia’s Saga
The watchdog issued a reminder when dealing with a crypto exchange, stating:
You should also check if the exchange holds your New Zealand dollars in a trust account.
The FMA said that locals need to make sure if the exchange is registered in the Financial Service Providers Register (FSPR). That’s a requirement to access a “dispute resolution scheme,” it added.
NZ Herald’s article also references Cryptopia’s heist — a Christchurch-based crypto exchange that suffered a major hack in January 2019. That year, the Cryptopia team estimated they lost almost 9.5% of their total holdings, and the article noted that “crypto deposits are not guaranteed.”
What do you think about the FMA’s crypto warning? Let us know in the comments section below.