What are cryptocurrency scams?
Digital currencies, including the well publicised Bitcoin and others such as Ethereum, have been around since 2008 and although these are popular investment options, the currencies aren't regulated in New Zealand. The Financial Markets Authority (FMA) website has a good overview of cryptocurrencies.
Cryptocurrencies and anyone trading in digtal currencies are often the target of attacks, online fraud and scams. In recent years there have been attacks on cryptocurrency exchanges, the places where currencies are stored, leading to investors losing significant sums. More recently scams are circulating on social media sites, offering unrealistic investment returns. Some of these scams claim to be endorsed by well-known New Zealanders or are run as pyramid type schemes where investors are encouraged to bring others on board the scheme.
CERT NZ have some further details about cryptocurrency security and The Spinoff show you how to spot a cryptocurrency scam.
Tips to avoid cryptocurrency scams
- Be aware of the risks.
- Know what you’re getting into when purchasing cryptocurrency.
- Do your research into the platforms you're using to purchase or trade digital currencies.
- Use extreme caution when interacting with any digital ads offering cryptocurrency investments.