Crypto investors are being encouraged to trade through local platforms after 24 New Zealanders were caught up in an overseas privacy breach.
The blockchain community is reminding investors to do their due diligence online. Photo: 123RF
About 5000 driver licences, passports and other data held by the cryptocurrency exchange AlphaEx, which wound up in August last year, have been published online.
The breach has prompted the blockchain community to remind people to do their due diligence when investing online.
Auckland University associate professor and BlockchainNZ member Alex Sims said if investors had done their research they would have seen that AlphaEx was an unauthorised exchange that had been flagged by overseas regulators.
The Malta Financial Services Authority issued a public warning about the firm in 2020 after it claimed to be registered in Malta when it was not.
Sims said it was always a risk when people shared their personal information online, but it was incumbent on them to research the website or the trading platform's background to make sure it was legitimate.
"If you're in New Zealand, probably the best thing to do is to use a [crypto exchange] in New Zealand because they are registered, they have dispute resolution processes that they have to sign up to.
"Sure, they will be a little bit more expensive, but you've got more protection than if you go and do something offshore."
She said if prospective investors were considering trading through an overseas exchange, which can often have lower fees, they had to be aware of the risks.
Cyber support charity IDCARE had not been able to get hold of AlphaEx or any of the affected New Zealanders.
The Office of the Privacy Commissioner encourages New Zealanders who may have been affected to contact IDCARE as soon as possible, and to visit www.privacy.org.nz for further information and resources on privacy rights and responsibilities in New Zealand.
The AlphaEx data breach was not the first time New Zealander's had their personal data stolen from a cryptocurrency exchange.
Christchurch-based exchange Cryptopia was hacked in 2019, with $25 million worth of members funds being transferred to an unknown digital wallet.
The exchange had more than 900,000 active users around the world, about 9475 of which were in New Zealand.
The company was subsequently liquidated, and evidence later filed in court suggested the business did not meet its legal requirements when setting up new customer accounts.
A lengthy process is still underway to return money back to investors, many of whom are domiciled overseas.