New Zealand Issues Warning About Three Cryptocurrency-Related Scams

  • New Zealand’s Financial Markets Authority has added three “suspected scams” to their Warnings & Alerts list.
  • Cryptogain, Russ Horn, and Zend Trade are the companies in question that the government wants citizens to stay away from.

Earlier today, New Zealand’s Financial Markets Authority (FMA) added three new companies to its list of “suspected scams.” The three companies are Zend Trade, Cryptogain, and Russ Horn (also known as Forex Equinox). These three companies have been added to the New Zealand FMA’s “Warnings & Alerts” list. This list is an ongoing effort by the New Zealand government to help investors avoid putting their money into the hands of questionable people.

The three companies were labeled as “Suspected Scams,” which means: “We think the operations of the business/person bear the hallmarks of a scam. We strongly recommend that you do not deal with them.” The full list of warnings & alerts can be found here.

CryptoGain appears to be a scam similar to BitConnect, promising daily returns for their investors. On their website, CryptoGainLimited.com, they offer up to 2.6% daily returns for people who invest in their company. Additionally, they offer cloud mining packages (with 30% weekly returns) and a retirement plan (giving “30% profit after retirement”). Such sky-high returns will set off alarms for many investors, as well as their cloud mining offering, which is currently considered an unregistered security in the United States.

In addition, the FMA has identified that CryptoGain is possibly posing as a fake company. There is a company filed as CryptoGainLimited, but it is not related to the company described above. Therefore, the FMA believes this is likely not legitimate.

The other companies - Russ Horn, Forex Equinox, and Zend Trade - are all suspected to be organized under Russ Horn’s leadership. RussHorn.com and ForexEquinox are not scams in the sense that they will take your money - they seem to simply be exaggerated marketing pitches for Russ’ forex trading system.

His website offers a “free plus shipping” book. Although not a scam in the sense of failed project BitConnect, Russ Horn’s website does include some outlandish claims, including “How To Legally Cheat The Forex Markets And Literally Line Your Pockets With Cash.”

ForexEquinox.com claims that his system can “double your money every 30 days.”

Ongoing Suspicions

Zend Trade has been suspected of being a scam after it was found that Zend is not returning clients funds. Unlike ForexEquinox, which teaches people how to trade, ZendTrade offers “Managed Account Services.” This service means that ZendTrade will hold clients' money and trade for them, which could put them under regulatory scrutiny, since this service sounds much more like a hedge fund. FMA claims that this company is connected to Russ Horn.

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Those Banned From Facebook May Not Be Able to Use Its Cryptocurrency Libra

Facebook’s two days of congressional hearings on the social media giant’s cryptocurrency ambitions seemingly revealed that those who have been banned from Facebook may not have access to Libra.

During the congressional hearing Facebook had to answer some tough questions, and one of them came from Representative Sean Duffy, which asked the company’s cryptocurrency head, David Marcus, who’ll have access to Libra.

The Congressman initially asked Marcus who could use the cryptocurrency, to which Calibra’s CEO answered: “anyone that can open a Calibra account, that can go through KYC [know-your-customer checks] in countries where we can operate.”

Duffy then referenced two individuals banned from Facebook for violating its community guidelines, Louis Farrakhan and Milo Yiannopoulo, and asked whether they’ll be able to use the social media giant’s cryptocurrency.

Marcus ended up replying he doesn’t “know yet,” after seeing Duffy hold a $20 bill and ask hin who can use it. His point was that cash doesn’t discriminate, and that anyone who can hold it can use it.

While throughout the hearing Marcus tried to point out the company will follow appropriate regulations and comply with lawmakers, Duffy responded that a proper answer would be “as long as you abide by the law, you can use Libra.” The fact he didn’t get this answer, Duffy said, gave him “great pause.”

Speaking to The Daily Beast Elka Looks, a Facebook spokeswoman, clarified Marcus addressed the Congressman’s concerns later on in the hearing. She stated:

For Libra, anyone who is engaging in lawful activity will be able to transact on the network. Facebook will have no say. For Calibra, there is no policy in place yet, but we will share it when it is closer to being finalized.

The news outlet adds that Calibra, Facebook’s wallet to send, receive, and hold Libra, doesn’t yet have final terms of service or a privacy policy. All of this means that those who’ve been banned on Facebook may not have access to its cryptocurrency.

As CryptoGlobe covered, Congressman Warren Davidson implied during the hearings Facebook’s crypto is a ‘shitcoin’ as it doesn’t have some of the properties bitcoin has. The Congressman made it clear bitcoin has no central authority that can censor transactions or dilute its value, while Libra has the Libbra Association.