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.

Malta, the ‘Blockchain Island’ Dominates Crypto Markets’ Trading Volume

Malta, a small nation that became known as the ‘blockchain island’ for its friendly approach to cryptocurrency-related businesses, has seemingly been dominating the cryptocurrency markets when it comes to trading volume.

The country, which was the first to establish a full regulatory framework for distributed ledger technology (DLT),  saw leading cryptocurrency exchange Binance move there after facing regulatory problems in Asia last year.

The exchange seemingly started a trend, as since then various large cryptocurrency trading platforms have followed its footsteps and moved to the cryptocurrency-friendly nation. Exchanges that are now registered in Malta include OKex, BitBay, Alpahex, and Nebula.

The influence these exchanges have is notable in the market, and has helped Malta stand out. According to CryptoCompare’s March 2018 Exchange Review, monthly trading volume from Maltese-registered exchanges increased 56% since February, leading the crypto market by volume.

Cryptocurrency trading volume per jurisdiction in MarchSource: CryptoCompare Exchange Review

Behind Malta were Hong Kong and South Korea, as these countries saw trading volume flowing through exchanges registered there by 54% and 21% respectively. The report notes that in March, Malta-registered exchanges traded $56.1 billion, while those in Hong Kong traded $53.1 billion, and those in South Korea traded $40.2 billion.

While Binance and OKEx helped Malta lead the crypto markets by trading volume, various cryptocurrency exchanges including LBank, BitZ, and HitBTC helped Hong Kong get to second place. South Korea’s place was achieved thanks to UPBit and the controversial Bithumb.

Other countries in Europe notably stayed at the bottom of the pack when it comes to cryptocurrency exchanges’ trading volumes. Malta’s leadership can be attributed to its attitude towards blockchain and cryptocurrencies.

As covered the country’s Prime Minister, Joseph Muscat, revealed in September of last year he believes “blockchain makes cryptocurrencies the inevitable future of money.” Malta’s pro-crypto approach saw become the first country to put all educational certificates on the blockchain, and have a cryptocurrency-related conference. In it, OKEx was named “Crypto Exchange of Year.”

Despite its friendly approach, the ‘blockchain island’ has also issued warnings against “get-rich-quick” bitcoin scams and other allegedly fraudulent firms trying to swindle investors.