SEC again warns investors against bitcoin futures funds
|The U.S. Securities and Exchange Commission (SEC) sent out a second note to investors urging to reevaluate Bitcoin futures-focused funds.
The U.S. Securities and Exchange Commission (SEC) reiterated the risks of investing in bitcoin (BTC, -2.24%) futures-focused funds with a staff note on Thursday that underscores the uphill battle that U.S. bitcoin exchange-traded funds (ETFs) face.
In an emailed investor bulletin obtained by CoinDesk, staffers “urge investors considering a fund with exposure to the Bitcoin futures market to weigh carefully the potential risks and benefits of the investment,” the note said, warning investors that the cryptocurrency as an investment is “highly speculative.”
This is the second recent warning the SEC has sent out in regards to Bitcoin’s risk. Last month, it sent out a note to investors highlighting that it may not be safe yet to support an exchange-traded fund under the Investment Advisers Act of 1940 because of Bitcoin’s volatility.
Most bitcoin ETF applications are filed under a different law, the Securities Act of 1933, due to differences in how these laws treat such applications. The SEC has long warned against filing bitcoin products under the ‘40 Act.
This comes at a time when large traditional banks and investment funds increasingly announce their interest in cryptocurrencies, both personal and corporate. In March, investment bank Morgan Stanley started offering clients access to Bitcoin funds and in May, Wells Fargo announced it would introduce a cryptocurrency fund.
Just yesterday, CoinDesk reported that investment banker Ken Moelis started looking into the crypto space as a potential business opportunity.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.