The Commerce Commission is investigating a cryptocurrency multi-level marketing scheme,known as Lion's Share.
It encourages people to pay hundreds of dollars to join the scheme in the hopes of being rewarded in cryptocurrencies from each new person they signed-up.
A special counsel at law firm Bell Gully, Campbell Pentney, said in his opinion Lion's Share had the characteristics of a pyramid scheme.
"The platform does not itself appear to have any way to generate profits other than by way of receiving funds from subsequent investors - referred to as 'commissions'," Pentney said.
Pyramid selling schemes are illegal under the Fair Trading Act, because they make money from the recruitment of others, rather than from the sale of a product or service.
The Commerce Commission, which enforces the Fair Trading Act, has received complaints about the scheme. It confirmed to RNZ it had opened a formal investigation into the promotion of Lion's Share in New Zealand.
However, no further details about the scope of the investigation were provided.
One of the scheme's local promoters, South Auckland woman Shelly Cullen, said in a social media posting on 18 November she would meet with the commission.
RNZ approached Cullen for comment but she did not respond.
Cullen has regularly held seminars online and in person stating Lion's Share gives people an opportunity to earn extra money.
She is popular on social media, with some of her videos receiving tens of thousands of views.
In one video on YouTube, she claimed she made $154,000 from Lion's Share in less than two weeks.
She included a disclaimer where she warned people that Lion's Share was a risk and there was no guarantee they would profit from the scheme.
However, she followed that by saying "risk is the new safe".