New Zealand’s financial services regulator has issued a fresh warning over digital currencies, urging would-be investors to take care amid rallies in digital asset prices.
The New Zealand Financial Markets Authority (FMA) singled out BTC as a highly volatile, risky asset, warning individuals they may lose the full value of their investment in a market reversal.
According to reports in local press, the regulator said digital assets and cryptocurrencies were not regulated in New Zealand, and consequently did not enjoy the same protections as other asset classes and investments.
The FMA also highlighted concerns around the number of scams and frauds being perpetrated in the crypto space, particularly around BTC, which continue to leave victims significantly out of pocket.
“Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers. New Zealanders considering purchasing cryptocurrencies, such as Bitcoin, should be aware that these are high risk and highly volatile assets.”
The warnings follow on from similar messaging this week from the Financial Conduct Authority (FCA) in the U.K., which issued a notice in stark terms about the risks of speculating on digital currency assets.
According to the FMA, these are concerns shared in New Zealand, with unsuspecting investors liable to losing all of their money.
“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. Many overseas cryptocurrency exchanges are unregulated and operate exclusively online, with no connection to New Zealand. This makes it hard to find out who is offering, exchanging, buying, or selling the cryptocurrencies.”
The warnings come at a time of inflated digital currency pricing, following an extended rally for tokens like BTC in recent weeks. With BTC scams already at high levels, the price movements will only increase the pressure on regulators and investors to tackle and avoid digital currency scams.