New Zealand's Financial Authority Updates List Of 'Suspected' Crypto Scams

Kevin O'Brien

New Zealand’s Financial Markets Authority (FMA) has made a couple of updates to its list of suspected scams by providing information and insight into a couple of cryptocurrency platforms.

Recently, the FMA advised “extreme caution” before investing into OneLife or OneCoin as they “bear the characteristics of a scam.” The regulator indicated they have been “withholding client funds and promising unrealistic funds.”

On the same day, the financial authority updated an entry for Bitcoin Revolution Limited, a platform “that could be involved in a scam.” The website for Bitcoin Revolution Limited advertises how people can “earn up to $1000 per hour or more, starting today!.”

Activities Have Attracted The Attention Of Regulators

The FMA indicated it believes OneLife and OneCoin are breaking New Zealand Law by holding various promotional events and seminars inside the country. A number of global regulators and financial authorities have also published warnings and briefings on OneLife and OneCoin.

OneCoin’s Bulgarian address attracted the attention of the nation’s Financial Supervision Commission, who released an announcement on the platform back in October 2015. It warned investors and consumers that OneCoin was “not regulated by the acting European and national legislation in the area of capital markets.” The Commission noted cryptocurrency investment carries a high degree of risk.

In July 2016, the Belgian Financial Services and Markets Authority (FSMA) warned the public “neither OneCoin, nor the persons promoting OneCoin have been recognized or authorized by the FSMA.”

New Zealand’s FMA also indicated in the release for Bitcoin Revolution Limited how “articles posted on social media about The New Zealand Treasury and/or current or former prime ministers investing in bitcoin are false.” About a year ago, former Prime Minister John Key said he was the victim of a fake New Zealand Herald website that purportedly featured him endorsing bitcoin.  

The fake page was set up by an overseas website and had the former prime minister saying he invested in bitcoin early on and now held $300 million dollar’s worth of the cryptocurrecy. Key noted he never invested in bitcoin.

New Zealand Authorities On The Hunt For Scams

Police inside the small country have been warning citizens to stay vigilant against online scams that involve cryptocurrency.

In late September, police in Canterbury released a news memo about a criminal scheme where a victim lost $320,000 via a cryptocurrency scam. Police said the company “offered extremely good returns from a minimal investment” in cryptocurrencies like bitcoin.

MyEtherWallet Fiat Offramp Established Through Swiss-Based Bity

The well-regarded Ethereum wallet platform MyEtherWallet (MEW) has teamed up with Swiss crypto brokerage Bity to offer crypto-to-fiat transfers of up to approximately 5,000 Swiss Francs - with no personal Know-Your-Customer/Anti-Money-Laundering (KYC/AML) checks required, MEW have said on their Medium blog.

Bity are fully regulated regulated in Switzerland, and offer one-way transfers into CHF and Euro bank accounts. Transfers are not completely opaque, however, with users having to submit bank account information and a physical address associated with it - which they must trust MEW to and Bity to not hold after the transaction.

Besides their new agreement with MEW, Bity also offer their own exchange service and interface, as well as several Bitcoin ATMs spread around Switzerland.

The new exit-to-fiat option on MEW joins the platform’s already established purchasing options, which were implemented mid-2018 in partnership with Simplex.

MEW, long a fixture of the Ethereum space, abruptly split into two separate projects last year when a MEW team member broke off to form the similar MyCrypto wallet - confusingly hijacking MEW’s twitter account in the process.

Despite remaining similar products, one distinguishing feature of the MyCrypto wallet is the availability of a standalone, downloadable client.

5MLD

Bity are regulated in Switzerland, which is not a EU member state and thus will not directly fall within the new Fifth Anti-Money Laundering Directive or “5MLD.” But since they will offer transfers to EU bank accounts, they will still be indrectly affected by the new rules. One of the 5MLD’s main objectives is to more closely monitor financial transactions to and within EU banks for terrorist financing.

However, the new regime for the first time also enacts EU-wide rules regarding “virtual currencies,” and subjects both cryptoasset exchanges and custodial wallets to the same EU KYC/AML requirements as other EU financial entities. Ireland and the Netherlands have already made moves towards compliance with the new rules, with the rest of the bloc required to comply by early 2020.