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SEC Issues Investor Alert to Warn About Funds That Have Exposure to Bitcoin Futures

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Thu, 06/10/2021 - 18:58
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Alex Dovbnya
The SEC has issued a warning about funds with exposure to Bitcoin futures
SEC Issues Investor Alert to Warn About Funds That Have Exposure to Bitcoin Futures
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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.   

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IMF Not Happy About El Salvador's Bitcoin Bombshell

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.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.