World's largest cryptocurrency platform Binance to be set up in New Zealand

The world's largest blockchain and cryptocurrency platform Binance is setting up shop in New Zealand.

The company wants us to buy into a virtual world it claims would help our economy expand.

But tech experts are warning about the risks of investing in something that doesn't actually exist.

Cryptocurrency, blockchain and Web3 don't exist physically except in a virtual world.

"This is a new technology for money. If [the] internet was a new technology for transferring information, blockchain, Web3, crypto is a new technology for transferring value," Changpeng Zhao, the founder of Binance, said.

It means you could buy not just cryptocurrency, but with blockchain and Web3, but the 'virtual' equivalent of anything online - from a ticket stub to artwork, to a city like Auckland, then trade it.

"Crypto Web3 technology will power the economy to be ten or a hundred times than the economy we have today," Zhao told Newshub.

"I think this technology will increase any economy 10-folds easily over the next 10 [to] 20 years."

This foray into New Zealand will be bound by our regulatory framework.

"We're fully compliant with New Zealand local regulations, local laws and oversight by the New Zealand regulators," Zhao said.

The Financial Markets Authority has released a statement saying it's aware of Binance's intention to register and if people want to invest in cryptocurrencies they should use a New Zealand-based platform.

Associate commercial law professor Alex Sims said this will afford New Zealand investors some protection in dispute resolution.

"If you use an exchange overseas that's not registered in New Zealand, you don't get that protection at all. But it's not complete protection. These things go up and down it's no guarantee you're going to make any money and you may well lose money."

Cryptocurrencies remain a high risk and highly volatile and people who use them are often the targets of hacking, online fraud and scams.

A government source told Newshub that Financial Service Providers registration isn't a certification. It doesn't mean the company has to meet standards because it's not a licence, it's just an administrative requirement.

However, Binance claims crypto is here to stay and will create hundreds of jobs in New Zealand in the next couple of years.