SEC News: The US Securities and Exchange Commission (SEC) has warned investors about the risks of Bitcoin futures. In its latest warning, the SEC particularly noted market volatility and a lack of regulation.
The financial regulator has outlined key points that investors should “think carefully” before investing in a Bitcoin futures fund.
SEC warns crypto investors: “Be careful”
“Investors should understand that Bitcoin is a highly speculative investment, including taking risks through the Bitcoin futures market,” the SEC said in its June 10 “Investor Alerts” bulletin. This latest Bitcoin risk warning from the financial regulator follows a note it sent out last month, warning investors to think twice because of the risks “involving in a mutual fund that interacts with the Bitcoin futures market.”
The SEC noted that although investments in any type of fund involve risk, “funds that buy or sell Bitcoin futures can have unique characteristics and high risks compared to others.”
— Drew Hinkes (@propelforward) June 10, 2021
“Investors should consider the volatility of the Bitcoin and Bitcoin futures market, as well as the potential for fraud or manipulation as well as the lack of regulation in the Bitcoin market,” the financial regulator stressed that Bitcoin price is not necessarily correlated with the value of funds in futures positions.
According to the SEC, this is partly due to the funds’ potential lack of direct exposure to “core assets.” Earlier, US Senator Elizabeth Warren called cryptocurrencies a “fake and lousy investment.”