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 price. “Cryptocurrencies are not regulated in New Zealand and are often exploited by scammers and hackers,” an FMA spokesman noted. 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.”
FMA warns of unregulated overseas crypto exchanges.
The FMA advisory includes a warning on unregulated overseas crypto exchanges. The FMA spokesman added that the crypto exchanges with no connection to New Zealand make it “hard to find out who is offering, exchanging, buying or selling” cryptos. The watchdog issued a reminder when dealing with a crypto exchange, stating, users should also check if the exchange holds their 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.
FCA bans crypto derivatives sale.
As reported earlier, the ban on the sale of cryptocurrency derivatives to retail investors in the U.K. has officially gone into effect. The ban was proposed by the Financial Conduct Authority (FCA) in October and became law on January 6 this year. The U.K.’s financial regulator said that crypto derivatives aren’t suitable for retail customers because of the harm they pose. According to the financial regulator, the crypto derivatives ban will save £53 million ($72 million) in losses to investors. FCA also noted that customers could not accurately value the derivatives because of the prevalence of market manipulation, extreme volatility, inadequate understanding, and the inherent nature of cryptocurrencies.