New Zealand warns of risks of investing in cryptocurrencies
Date: 2025-07-03 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
The Financial Monitoring Agency of New Zealand (FMA) has published a statement in which it emphasized that investments in cryptocurrencies are associated with a high level of risk. According to the agency, sharp jumps in the rates of crypto assets are due to the lack of physical assets that could guarantee their value. Unlike traditional instruments, the price of digital coins largely depends on investor sentiment and market speculation.
Despite this, the FMA also noted some advantages of popular cryptocurrencies - for example, fast transaction processing and relatively low fees. These advantages make such assets attractive to users who prefer to do without the mediation of banks and traditional financial institutions. However, it is decentralization and work through offshore platforms that make it difficult to control the market and increase the likelihood of fraud.
In particular, the regulator included BTC, ETH, USDT, XRP and BNB in the list of large assets by capitalization. At the same time, the agency emphasized that cryptocurrency transactions are not yet officially regulated in the country, and in the event of losses, investors will not be able to count on state protection. To reduce risks, the FMA strongly recommended cooperating only with platforms included in the New Zealand Financial Services Providers Register (FSPR). Companies operating legally are required to comply with anti-money laundering requirements, which increases the transparency of transactions.
The regulator paid special attention to advertising campaigns on social networks, where famous personalities can promote cryptocurrencies and promise quick profits. The FMA warned that many of these ads are pre-paid promotions or fraudulent schemes. Often, fraudsters create fake websites and show potential investors fictitious income data, forcing them to deposit more and more funds.
Among other things, last year New Zealand tightened reporting requirements for service providers related to virtual assets. Local traders are now required to declare income earned from digital asset transactions.
FMA concluded by urging investors to exercise extreme caution and thoroughly check any information about cryptocurrencies before trusting their money to little-known platforms or flashy online advertising promises.
