New Zealand regulator warns against 2 entities allegedly engaged in digital asset fraud

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The Financial Markets Authority (FMA) of New Zealand has issued a warning to the public against two alleged digital asset scams operating in the country. The warnings were directed at Krypto Security and Bay Exchange, which the regulator said are charging non-existent fees and participating in unregulated market activity.

“We are concerned that Bay Exchange is providing financial services to New Zealand residents without complying with the New Zealand financial markets legislation,” said the FMA. “Bay Exchange is not registered on the Financial Service Providers Register to provide their services in New Zealand.”

Bay Exchange describes itself as a London-based digital asset exchange leveraging artificial intelligence to make trades for clients. However, law enforcement agencies in New Zealand have been inundated with multiple reports of residents being unable to access funds after making deposits.

The FMA’s warning included Bay Exchange’s contact details and a recommendation to investors to exercise extreme caution in dealing with the platform.

In a separate advisory, the financial watchdog raised the alarm over the activities of Krypto Security, an entity posing as being able to help residents recover their stolen digital assets. According to the FMA, Krypto Security’s modus operandi involves asking victims to pay for a “barcode” to meet the New Zealand Anti-Money Laundering legislative requirements.

The FMA seized the moment to inform residents “that there is no such requirement in New Zealand.” Residents were warned to remain alert for individuals masquerading as officials of the FMA by paying attention to the emails used by fraudsters.

“We note that the .govt.nz is the email domain used by government agencies in New Zealand,” read the warning. “We recommend acting cautiously when dealing with entities or individuals who offer assistance in the recovery of any lost investments or monies.”

Not the first time for citizens

New Zealand has faced a barrage of attacks from bad actors in the past looking to pilfer virtual currencies from citizens. In October, the FMA issued a public advisory against an impersonator cold-calling residents to gain access to personal information.

“If you get an unsolicited call, we recommend you hang up and contact us directly via the contact information provided on our website,” read the FMA’s warning.

Bad actors have been identified as impersonating and cloning credible digital asset companies to steal assets from unsuspecting investors. Horizon Capital, Golden Chase, and NZ Global Trading have all been targeted by hackers looking to defraud New Zealand’s investors.

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