Following the footsteps of the United Kingdom’s Financial Conduct Authority (FCA), the financial regulatory authority of New Zealand, Financial Markets Authority (FMA) has also issued a warning to investors in the country that are interested in investing in digital currencies. The financial watchdog said that they need to be wary of high-profile cryptocurrency investments as there are some risks attached to them.
The local news media outlet NZ Herald reported on Monday that a warning on digital currency investments’ risks has been issued by New Zealand’s FMA to the residents of the country. In the cryptocurrency warning, the regulator said that those who want to invest in cryptocurrencies should be prepared for losing their money. The warning of FMA is about those crypto investments that pledge to offer high returns or profits. Such kinds of cryptocurrency investments come with extreme risks, which may cause investors to face loss.
While sharing its concerns regarding growing crypto investments’ risks, the FMA said that digital currencies are not yet regulated properly in the country. And hackers and fraudsters attack the crypto sector and exploit digital assets. Particularly, the financial regulatory mentioned Bitcoin (BTC), the world’s largest digital currency in terms of market cap, saying that it is highly volatile in nature and involves risks.
That is why the regulatory authority has warned investors in the country to think about these risks before they consider buying digital assets. FMA also shared concerns of the UK’s Financial Conduct Authority and said that there are some digital currency exchanges in the crypto space which promise high profits to clients. While talking about the status of crypto exchanges, a spokesperson from the regulatory authority said that out of them, several are not regulated properly. As they run their activities online, so it is really difficult to trace them.
This cryptocurrency warning from New Zealand’s Financial Markets Authority came one day after the British financial regulatory authority released a crypto warning while asking UK investors to be aware of those digital currency investments that offer maximum profits.
FMA’s warning to investors came at a time when the leading digital currency retested the price mark of $40,000. This bullish action of Bitcoin probably was the real reason behind this.