According to a Tuesday report by the NZ Herald, the Financial Markets Authority (FMA) said New Zealanders who were considering purchasing cryptocurrencies needed to be aware they are “high risk and highly volatile” assets.
An FMA spokesperson told the Herald that “Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers.”
According to Coindesk, the warning comes a day after the regulator’s U.K. counterpart, the Financial Conduct Authority (FCA), also raised similar concerns. The FCA stated that people should be prepared to lose “all their money” if they choose to invest in crypto products promising high yields.
The spokesperson said:
“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.”
Overseas cryptocurrency exchanges are “unregulated” and operate solely online, making it harder to track the operators, the watchdog cautioned.
They said that users should check if an exchange holds New Zealand dollars in a trust account.
Beginning Dec. 1, the price of bitcoin (BTC) rose 124% from about $ 18,770 to record highs near $ 42,000 on Friday. The world’s biggest cryptocurrency by market capitalization has dropped 18% since Sunday and is currently changing hands for about $ 35,150.