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Don’t be fooled by promises that are too good to be true

Astronomical returns can never be guaranteed. If a provider tells you you’ll be able to pay off your mortgage in two years or become a millionaire overnight, think twice. This is a tactic being used by some websites offering to help you trade cryptocurrency. Only invest if you’re sure the claims they make are true.

The news is currently full of stories about Bitcoin – selling a story about how to become a millionaire overnight. But we are receiving an increasing number of complaints from investors who’ve lost money using cryptocurrency exchanges.  For example, some investors have told us they are unable to cash out.  Other people have lost amounts from their ewallets or have been locked out of their accounts.   

If you lose your money buying cryptocurrency, we can’t help you. We recommend you only buy through exchanges that:

  • are based in New Zealand
  • are a member of a dispute resolution scheme
  • hold your New Zealand dollars in a trust account.

Even if you use a New Zealand based exchange, you will not be protected against trading losses. Buying and selling crypto currencies is highly speculative and the exchange rates for crypto currencies have historically been very volatile. 

Read our tips on cryptocurrencies to learn more about the risks to consider.