New Zealandâ€™s financial regulator issued a warning alert to local cryptocurrency investors and traders amid the recent bitcoinâ€™s price action. The Financial Markets Authority (FMA) asks people to remain cautious because cryptos are â€œhigh risk and highly volatile assets.â€�
FMA Warns About Unregulated Overseas Crypto Exchanges
According to an official statement published in the NZ Herald, New Zealandâ€™s financial watchdog is concerned about the latest â€œrollercoaster moveâ€� seen in the bitcoin (BTC) price. â€œCryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers,â€� said an FMA spokesman.
But the regulatorâ€™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 FCAâ€™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 â€œhard to find out who is offering, exchanging, buying or sellingâ€� cryptos.
The Cryptopiaâ€™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). Thatâ€™s a requirement to access a â€œdispute resolution scheme,â€� it added.
NZ Heraldâ€™s article also references Cryptopiaâ€™s heist â€” 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 â€œcrypto deposits are not guaranteed.â€�
What do you think about the FMAâ€™s crypto warning? Let us know in the comments section below.
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