$265 Million Cryptocurrency Scam

Police announced that during a three-day operation, they conducted raids on multiple addresses in Auckland, Wellington, and California, resulting in the detention of 13 individuals.

According to officials, an organized criminal network allegedly seized large amounts of cryptocurrency from seven victims between March and August 2024 and laundered the assets across different platforms.

The U.S. Department of Justice officially indicted the individual under federal law for racketeering, conspiracy to commit fraud, and conspiracy to launder money.

Luxury Lifestyle: Millions Spent on Cars and Extravagant Goods

Prosecutors stated that the suspects used the stolen funds to purchase luxury vehicles worth $9 million, and spent lavishly in areas like Los Angeles, Miami, and the Hamptons on nightclubs, private security, and high-end rentals.

It was also reported that significant amounts were spent on designer handbags, watches, and fashion items.

The Wellington-based suspect appeared before the Auckland District Court and was released on bail under temporary name suppression. The next court date was set for July 3.

New Zealand Police made the following statement:

“We have worked closely with law enforcement in the United States. Today’s search and arrest demonstrate the critical importance of international cooperation in cross-border crimes.”

Crypto Asset Thefts Peaked in April 2025

According to data from blockchain security firm PeckShield, approximately $360 million in digital assets were stolen across 18 separate cyber incidents in April 2025 alone. Compared to March’s reported $33 million in losses, this represents a 990% surge.

The majority of this spike stems from an unauthorized $330 million Bitcoin transfer, detected on April 28 by blockchain investigator ZachXBT. The transfer was later identified as the result of a social engineering attack targeting an elderly U.S. citizen and is considered one of the largest individual crypto thefts on record.

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The liquidators of the bankrupt Cryptopia exchange have started distributing millions of dollars to users affected by a hack that occurred almost six years ago. Cryptopia’s liquidating firm, Grant Thornton, announced on December 20 that distributions began for over 10,000 verified account holders impacted by the 2019 hack.

In the past two days, verified account holders of Bitcoin and Dogecoin received crypto distributions worth at least 400 million New Zealand dollars ($225 million).

These payouts mark a significant milestone in Cryptopia’s liquidation process since Grant Thornton launched the Cryptopia claims portal in 2020.

Grant Thornton Plans To Make More Distributions

After the first distribution, the liquidators will continue to follow the approved process and announce the cut-off dates before distributing the remaining BTC, DOGE, and other coins to account holders, according to Grant Thornton.

“The liquidator mentioned that an additional top-up distribution could be made to account holders, allowing them to receive up to 100% of their holdings using ‘unclaimed assets’ from those account holders who have not registered in the claims portal after the cut-off dates.”

Grant Thornton encouraged remaining Cryptopia account holders to register on the claims portal and complete the necessary steps for future distributions.

“Further distributions for newly verified users are planned for the New Year,” added Grant Thornton.

Cryptopia Had Lost $16 Million Due To The Hack in 2019

Founded in 2014, Cryptopia was an international cryptocurrency exchange and one of the first crypto exchange services in New Zealand.

At its peak, by 2018, it had approximately 1.4 million registered users and was the largest crypto exchange in New Zealand.

It was also one of the country’s first stablecoin issuers, launching the NZD-backed NZed (NZDT) stablecoin in May 2017.

After the hack in January 2019, initial analyses revealed that the exchange had lost approximately $16 million worth of various crypto assets.

In May 2019, Cryptopia’s liquidator, Grant Thornton, released an estimation report on the company’s financial state, stating that the hacked exchange owed a total of $4.2 million to its creditors.

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The country’s Minister of Revenue has put forward a proposal to adopt the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF) through a new legislative measure. This bill, titled “Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures),” was presented by Minister Simon Watts on August 26.

The proposed bill outlines the annual income tax rates and introduces provisions for tax relief. It also aims to implement the OECD’s CARF and make amendments to the Common Reporting Standard (CRS).

New Zealand’s Reporting Obligations for Crypto Service Providers

With these changes, crypto-asset service providers (RCASPs) in New Zealand will be required to start gathering information on users who are subject to reporting, starting from April 1, 2026. This data must be submitted to Inland Revenue by June 30, 2027.

Additionally, if the collected information concerns users from other jurisdictions, Inland Revenue will share it with the respective international tax authorities by September 30, 2027. Essentially, this means that the government will have access to data on cryptocurrency transactions conducted via New Zealand-based exchanges, ensuring that any profits made from crypto trading are appropriately taxed.

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The tax agency emphasized that the growth of the crypto market has made it difficult for tax authorities to track income derived from crypto activities. This has led to increased global efforts to ensure tax authorities can monitor income and investment opportunities facilitated through large-scale intermediaries.

New Zealand’s Penalties for Noncompliance

Under the new regulations, crypto service providers who fail to meet the reporting requirements will face penalties of 300 NZD ($186) for each instance of noncompliance, with a maximum fine of 10,000 NZD ($6,200).

If a provider does not take “reasonable care” in complying with CARF requirements, they may be fined between 20,000 and 100,000 NZD ($12,000 to $62,000). However, if noncompliance occurs due to reasons beyond the provider’s control, they will not be penalized. Additionally, users who do not provide the necessary information for compliance with the reporting rules could be fined 1,000 NZD ($621).

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At the center of this discourse is the proposal for a holding limit of $2000, reflecting the benchmark set by the digital Euro. This move underlines the Central Bank’s determination to prudently guide the digital currency landscape while promoting innovation and financial inclusion.

The emergence of central bank digital currencies (CBDCs) has attracted the attention of monetary authorities around the world, driven by the rise in cryptocurrency adoption. New Zealand’s exploration of CBDCs began in 2021, recognizing the transformative potential inherent in digital currencies. The current consultation reaffirms the belief that digital money can improve payment options, accessibility and innovation, ushering in a new era in financial services by leveraging features such as smart contracts.

Additionally, the consultation paper envisions a scenario where digital money catalyzes competition in New Zealand’s payments ecosystem, paving the way for innovative money and payment solutions from the private sector. In this envisioned future, digital cash distribution will be handed over to private sector organizations, offering New Zealanders the freedom to choose preferred services based on their needs.

While New Zealand remains in the early stages of its CBDC journey, the consultation highlights an informed and inclusive approach to decision-making. The envisaged CBDC will be seamlessly integrated into the existing financial framework denominated in New Zealand dollars, fully interchangeable with physical cash and accessible around the clock.

As the consultation period progresses, stakeholders are invited to contribute perspectives that will shape the course of New Zealand’s digital cash initiative. With the consultation scheduled to conclude on July 26, the country stands on the verge of a transformative leap into the digital currency space.

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New Zealand Central Bank Governor Adrian Orr Shares His Thoughts on Stablecoins

The remarks by Adrian Orr, Governor of the Reserve Bank of New Zealand, were prompted by concerns over the growing popularity of decentralized digital assets such as Bitcoin and stablecoins as an alternative to traditional currencies. Despite their widespread adoption among speculative investors, Orr noted that Bitcoin and stablecoins do not function effectively as a medium of exchange or store of value.

Expressing reservations about stablecoins, Orr highlighted their dependence on the financial health of issuers, warning that they are subject to the stability of underlying balance sheets. Describing stablecoins as “the ultimate misnomer and oxymoron”, Orr emphasized their speculative nature and distinguished them from legitimate currencies issued by central banks.

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