Financial Markets Authority warns against unlicensed investment scheme run by crypto company

The FMA has warned Kiwis about a managed investment scheme operated by Jesse Joseph Vaughan and former NZ company Crypto Partners Limited (CPL). Photo / 123RF

The Financial Markets Authority has issued a public warning about a managed investment scheme that may have caused “significant detriment” to Kiwi investors.

The FMA says the scheme is operating without a licence and is providing false information about licence applications.

The scheme is run by Jesse Joseph Vaughan and his former NZ company Crypto Partners Limited (CPL).

FMA executive director of response and enforcement Louise Unger said Vaughan might be misleading investors.

“We understand that Mr Vaughan, the sole director and shareholder of formerly registered company CPL, has offered investments in a managed investment scheme (MIS) operated by CPL.

“He did so without holding an MIS manager licence, and without providing the required disclosure, which are both contraventions of the Financial Markets Conduct Act 2013.”

Vaughan also incorrectly told his investors in a newsletter that he had applied for an MIS manager’s licence and that it was under FMA review.

“I can confirm that neither Mr Vaughan nor CPL has ever applied to the FMA for any form of market services licence.”

Unger promised that Vaughan would be held to account.

“One of the main purposes of the market services licensing regime is to require licensees to act with integrity, diligence and skill and in the best interests of investors using their services.

“We consider that CPL and Mr Vaughan’s conduct has been contrary to these obligations and investors are likely to have experienced significant detriment as a result.”

Investors in CPL who have not had their investments returned are encouraged to contact the FMA, as are people who have been invited by Vaughan to invest in his business.

Jaime Lyth is a multimedia journalist for the New Zealand Herald, focusing on crime and breaking news. Lyth began working under the NZ Herald masthead in 2021 as a reporter for the Northern Advocate in Whangārei.