The SEC's Office of Investor Education and Advocacy (OIEA) has issued an investor bulletin warning about some risks associated with funds that have exposure to Bitcoin futures.
The agency states that investors could be potentially vulnerable to fraud or manipulation in the underlying market:
As such, investors should consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market.
The OIEA says that investors have to consider such factors as risk tolerance, the fund’s risk disclosure, potential losses, and discrepancies between spot prices and futures prices.
It warns that the flagship cryptocurrency and its derivatives contracts are “highly speculative.”
As reported by U.Today, SEC chair Gary Gensler recently repeated his call for establishing a regulatory framework for crypto exchanges.