The United States Securities and Exchange Commission (SEC) reiterated the risks of investing in funds focused on Bitcoin futures with a staff memo on Thursday that highlights the uphill battle facing exchange-traded funds (ETFs). ) Americans are facing.
In an email investor newsletter obtained by CoinDesk, staff members “urge investors considering a fund with exposure to the Bitcoin futures market to carefully weigh the potential risks and rewards of the investment,” states the note, warning investors that cryptocurrency as an investment is “highly speculative.”
This is the second recent warning the SEC has sent out regarding Bitcoin’s risk. Last month, he sent a note to investors pointing out that it may not yet be safe to support an exchange-traded fund under the Investment Advisers Act of 1940 due to the volatility of Bitcoin. .
Most Bitcoin ETF applications are filed under a different law, the Securities Act of 1933, due to the differences in how those laws treat these 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 are increasingly announcing their interest in cryptocurrencies, both personal and corporate. In March, investment bank Morgan Stanley began offering clients access to Bitcoin funds, and in May, Wells Fargo announced that it would introduce a cryptocurrency fund.
As recently as yesterday, CoinDesk reported that investment banker Ken Moelis had started to view the crypto space as a potential business opportunity.