Growth in the cryptocurrency industry comes in many different forms. One worrisome trend is the growing number of scams. The financial authority of New Zealand is paying very close attention to any developments in this department. On their website, a fair few suspected scams have been reported over the past few weeks.
Addressing Cryptocurrency Scams
A lot of people pay attention to existing and new cryptocurrencies. Not all of these projects are legitimate, which is only to be expected. Numerous examples of fraudulent projects have been documented over the years. In the past year, governments around the world have begun warning consumers about potentially risky projects.
In New Zealand, a dedicated FMA page has been created for this purpose. It keeps track of suspected scams, fake claims, and unregistered business offerings, The number of suspected scams has grown steadily in the past few weeks. At least 20 projects have been listed on this page since early August of 2018.
In most cases, the FMA advises users to be cautious when dealing with such companies. A large number of reports label projects as having “characteristics of a scam”. A fair few of them seem to offer high guaranteed returns on investment with no clear business model. That particular approach has become a common scamming tactic in the cryptocurrency industry.
New Zealand Sets a Commendable Example
Rather than ignoring cryptocurrency, the FMA does the right thing. It aims to protect New Zealanders from suffering financial losses because of fraudulent cryptocurrency projects. Issuing official warning signs can help novice investors avoid major issues down the line.
This approach also highlights the need for clear regulatory measures. In New Zealand, there is no official regulation pertaining to Bitcoin and similar currencies. That situation will need to change sooner rather than later. A similar “grey area” exists in most other countries around the world. Drafting regulatory guidelines for Bitcoin has been a time-consuming process first and foremost.
For enthusiasts and investors, this FMA page can be of great value. Any projects offering something that sounds too good to be true carries risk. Cryptocurrency is a volatile industry at all times. There is no legitimate way of guaranteeing profits over time. The year 2018 has proven all currencies and assets lose a lot of value in a few months.
Do you think that government warnings about suspected cryptocurrency scams serve a legitimate purpose or do they just cast crypto in a bad light? Let us know in the comments below.
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