FMA Cracks Down on These Two Companies amid Fraud Concerns in New Zealand

TheFinancial Markets Authority (FMA) of New Zealand has been actively combatingfraudulent activity and scams in the country's financial markets. In a seriesof recent actions, the regulator has taken steps to protect consumers andmaintain market integrity by cancelling one crowdfunding services license andissuing a warning against a cryptocurrency company.

FMA Cracks Down onFraudulent Activity and Scams

Accordingto the update on Wednesday, the FMA cancelled the crowdfunding services license ofEquitise Pty Ltd, an equity crowdfunding service provider licensed since 2014.The cancellation followed Equitise's significant breach of certain marketservices licensee obligations and its failure to meet statutory requirements.

The companyfailed to provide its financial reporting and agreed upon procedures reporting,and was deregistered from the Financial Service Providers Register (FSPR) forfailing to file its annual confirmation within the required timeframe.

"Cancellinga provider's licence is one of the strongest regulatory actions we can take andis not a decision the FMA takes lightly, Peter Taylor, the FMA Director ofSpecialist Supervision and Response, stated, emphasizing the severity ofthe action. Financial service providers must make sure they are able to meetthe legislative requirements and act lawfully. The rules are there to protectconsumers and to ensure market integrity."

In anotherwarning, the FMA cautioned investors about AxonExchange, a suspectedcryptocurrency exchange scam. The platform claims to be based in New Zealandbut is not an incorporated company in the country and is not authorized orregistered on the FSPR to provide financial services.

The FMA isconcerned that AxonExchange is operating a scam, prompted by an investor's complaint of difficulty withdrawing funds from the platform.

Rising Number of Impostorsin New Zealand

Theregulatory authority in New Zealand has raised concerns about an increase inimpostor-related scams, particularly highlighting the rise in fake productdisclosure statement frauds. In 2023, there were 82 warnings issued regardingsuspected investment scams and impostor websites, as well as 22 warningsconcerning unregistered businesses. This marks a significant uptick in effortsto alert the public about these deceptive practices.

Additionally,the FMA has reported an emerging trend where scammers impersonate anotherregulatory body, specifically the UKs Financial Conduct Authority. Thesescammers send emails to New Zealand residents claiming they can assist inrecovering funds lost in previous scams.

Accordingto a report published by the FMA at the end of last year, while the totalnumber of crime warnings decreased to 89 in 2023 from 111 the previous year,there was a noteworthy increase in the number of impostors and imposterwebsites. The report noted 29 such cases in 2023, a significant rise fromprevious years when similar cases were isolated and not statistically relevant.

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FMA Warns against Crypto Fraudsters and Impersonators

<p> The Financial Markets Authority (<a href="https://www.financemagnates.com/tag/fma/" target="_blank" rel="follow">FMA</a>), New Zealand's regulatory market watchdog, issued two crypto scam warnings on Monday, alerting against a potential charge of non-existent fees and unregulated activity.</p><p class="MsoNormal">According to separate press releases published on 12 December 2022, Krypto Security and Bay Exchange are contacting New Zealand citizens to offer access to cryptocurrency services. However, none of these companies are regulated by the FMA.</p><p class="MsoNormal">Bay Exchange claims it is a London-based <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" target="_blank" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa_1" class="terms__main-term">cryptocurrency exchange</a> offering 'AI Software' for automatic decision-making and trade execution. However, New Zealand's residents cannot access their accounts after making their initial deposits. </p><p class="MsoNormal">"We are concerned that Bay Exchange is providing financial services to residents without complying with the New Zealand financial markets legislation. Bay Exchange is not registered on the Financial Service Providers Register to provide their services in New Zealand," the FMA stated.</p><p class="MsoNormal">Bay Exchange provides its services through the bayexchange.com website. New Zealand's regulator recommends exercising extreme caution.</p><p class="MsoNormal">Krypto Security is the second company added to the FMA's scam alert list on Monday. Its representatives contact New Zealand's residents claiming the entity may help recover stolen cryptos. However, before starting the recovery process, Krypto Security requires a payment of a sizable commission. </p><p class="MsoNormal">"Various large fees have been charged in the recovery process, including a payment for a 'barcode' to meet the New Zealand Anti-Money Laundering legislative requirements. We note that there is no such requirement in New Zealand," the FMA commented in a separate statement.</p><p class="MsoNormal">Scammers have been contacting victims by phone and email, trying to impersonate the FMA's officials using the @gmail.com domain addresses. The FMA reminds the agency uses only the official .govt.nz domain, like other government agencies in <a href="https://www.financemagnates.com/tag/new-zealand/" target="_blank" rel="follow">New Zealand</a>. Moreover, the regulator never contacts consumers to pay commissions or additional fees.</p><p>Watch Out for Imposters</p><p class="MsoNormal">Crypto Security activity is not the first time scammers have impersonated the New Zealand FMA to deceive consumers and investors. In October, the regulatory market watchdog <a href="https://www.financemagnates.com/forex/fma-warns-against-fraudster-impersonating-the-regulator/" target="_blank" rel="follow">issued a warning</a> against an individual claiming to work for the regulator. The fraudster was cold-calling members of the public to obtain personal information.</p><p class="MsoNormal">"If you get an unsolicited call, we recommend you hang up and contact us directly via the contact information provided on our website," the FMA advised. </p><p class="MsoNormal">Furthermore, the institution has warned against entities impersonating licensed trading companies on several occasions. Previous alerts were related to <a href="https://www.financemagnates.com/terms/c/clone/" target="_blank" id="c02bac54-0735-474c-8969-06d3fdb49589_1" class="terms__secondary-term">clone</a> websites, including nzglobaltrading.com, horizoncapital.ltd and goldenchaseltd.com.</p> This article was written by Damian Chmiel at www.financemagnates.com.

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