Sunday, February 28, 2021
pool-ads
Home Latest News Policy and regulation New Zealand’s Financial Watchdog Warns on Crypto Investment Risks

New Zealand’s Financial Watchdog Warns on Crypto Investment Risks

After bitcoin’s latest price drop, New Zealand’s financial watchdog has sounded a warning whistle to cryptocurrency investors.

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.

Subscribe to our newsletter

To be updated with all the latest news, offers and special announcements.

SourceCoindesk

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
magazine-ads

Must Read

India’s Securities Regulator Wants IPO Promoters to Sell Crypto Holdings: Report

0
According to a report from the Economic Times on Monday, the Securities and Exchange Board of India (SEBI) has been informally communicating the message...