Home Crypto SEC Issues Stark Warning on Volatility, Potential for Manipulation in Bitcoin Futures...

SEC Issues Stark Warning on Volatility, Potential for Manipulation in Bitcoin Futures Market

The U.S. Securities and Exchange Commission (SEC) is warning traders in regards to the dangers of investing in the highest cryptocurrency.

In a brand new statement, the SEC expresses concern relating to mutual funds taking positions in Bitcoin futures.

Investors ought to perceive that Bitcoin, together with gaining publicity by means of the Bitcoin futures market, is a extremely speculative funding.

As such, traders ought to contemplate the volatility of Bitcoin and the Bitcoin futures market, in addition to the shortage of regulation and potential for fraud or manipulation in the underlying Bitcoin market.”

As mutual funds search publicity to Bitcoin, the SEC’s Division of Investment Management (IM) employees notes that it “will intently monitor the influence of mutual funds’ investments in Bitcoin futures on investor safety, capital formation, and the equity and effectivity of markets.”

In addition, the IM recommends {that a} foray into the Bitcoin futures market ought to solely be sought out by mutual funds which have in place methods to mitigate dangers concerned in the sector and that these funds wishing to achieve publicity to the market ought to concern warnings in regards to the dangers concerned to their clientele.

Meanwhile, final week Gary Gensler, the newly appointed Chair of the SEC, mentioned he believes many crypto belongings at the moment on the market are literally securities and that the SEC has the authority to make that dedication.

“I feel to the extent one thing is a safety the SEC has a number of authority and a number of crypto tokens are certainly securities. The prior chair has indicated that [and] the prior SEC introduced quite a few enforcement actions to convey a few of these safety or funding contract tokens into the foundations.”

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