New Zealand’s financial regulator has warned investors of the dangers of investing in Bitcoin. The comments were aimed at the recent fluctuations in the price of the major cryptocurrencies, which have shown quite the amplitude.
New Zealand’s Financial Markets Authority (FMA) has issued a candid warning for investors from the country, considering their take on cryptocurrency and mainly Bitcoin. A recent news report by the Herald quoted the country’s financial watchdog, saying that crypto traders have to be prepared to “lose their money” if they invest in the digital asset.
The FMA had commented before the media outlet, pointing out the latest bedlam of Bitcoin’s price, when the crypto asset’s value showed quite the volatility. These drastic fluctuations have led to the financial authority’s recent advice, warning investors for underwater rocks when trusting the BTC and cryptocurrency in general.
A few days ago, the UK’s Financial Conduct Authority (FCA) also warned investors of the potential jeopardy of investing in specific digital asset endeavors. The UK’s watchdog pointed out the uncertain and risky nature of the crypto industry. It highlighted that investors should be prepared for worst-case scenarios, including, once again, losing all of their money.
On that matter, the UK’s FCA had made a step towards enhanced security for investors, setting cryptocurrency firms working in the country to register as approved establishments. The UK authority recently prolonged the deadline for the existing crypto firms from January 10, 2021, to July 9, 2021.
As per the FMA, New Zealand’s crypto investors, eyeing Bitcoin, have to be careful that these assets bring high risk and volatility.
“The FMA shares the FCA’s (Financial Conduct Authority) concerns that some crypto exchanges are promising high returns and customers should be prepared to lose all of their money,” reads the report.
Another reason for the watchdog’s opinion is that, just as in many other countries, cryptocurrencies are not regulated yet in New Zealand.
However, as a backup plan, New Zealand financial authorities strongly advise that investors who still plan to invest in cryptocurrencies should at least trust exchanges registered in the Financial Service Providers Register (FSPR).
Additionally, an FMA spokesman urged future investors to check if the exchange will store the NZD and cryptocurrency assets in a trust account.