The regulator called cryptocurrencies speculative investments with a high level of risk – the cryptocurrency course can grow and fall. Unlike traditional financial products, cryptocurrencies do not have enough basic physical assets to ensure their value, therefore, the value of cryptoactives largely depends on the mood of the traders, noted the FMA.
The department recognized that the cryptocurrencies BTC, ETH, USDT, XRP and BNB are considered large in market capitalization. The regulator also highlighted the advantages of cryptocurrencies: high transactions and low commissions. These factors attract users who do not want to rely on banks or financial institutions. However, this complicates the regulation of cryptocurrencies, especially when investments are performed through offshore or unregistered platforms. In addition, the absence of a central body regulating the activities of crypto companies creates a significant risk of loss of funds for investors.
FMA recalled that crypto acts are not regulated in New Zealand, so investors will not be able to count on legal protection in case of losses. FMA recommended working only with those platforms that are registered in the register of financial services of New Zealand (FSPR). Companies that have a work permit in the country comply with laws on the fight against laundering money, which increases transaction transaction transparency.
FMA called on investors to be careful with investments in cryptocurrencies, promoted in social networks by celebrities. Many advertising shares can be pre -paid, and investment offers turn out to be a fake to lure investors on fraudulent platforms. Often the creators of such websites promise high profit and demonstrate fictitious control panels with fake profit to users, prompting people to invest more money.
Last year, New Zealand tightened the requirements for the reporting of virtual assets services (VASP). Earlier, the country’s authorities demanded local traders to declare their income from cryptocurrency operations.
Source: Bits
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