SEC Again Warns Investors Against Bitcoin Futures Funds

The U.S. Securities and Exchange Commission (SEC) sent out a second note to investors urging to reevaluate bitcoin futures-focused funds.

AccessTimeIconJun 10, 2021 at 10:52 p.m. UTC
Updated Sep 14, 2021 at 1:09 p.m. UTC

The U.S. Securities and Exchange Commission (SEC) reiterated the risks of investing in bitcoin futures-focused funds with a staff note on Thursday that underscores the uphill battle U.S. bitcoin exchange-traded funds (ETFs) face.

In an emailed investor bulletin obtained by CoinDesk, staffers “urge investors considering a fund with exposure to the bitcoin futures market to weigh carefully the potential risks and benefits of the investment,” the note said, warning investors that the cryptocurrency as an investment is “highly speculative.”

This is the second recent warning the SEC has sent out in regards to bitcoin’s risk. Last month, it sent out a note to investors highlighting that it may not be safe yet to support an exchange-traded fund under the Investment Advisers Act of 1940 because of Bitcoin’s volatility.

Most bitcoin ETF applications are filed under a different law, the Securities Act of 1933, due to differences in how these laws treat such applications. The SEC has long warned against filing bitcoin products under the 1940 Act.

This warning comes at a time when large traditional banks and investment funds increasingly announce their interest in cryptocurrencies, both personal and corporate. In March, investment bank Morgan Stanley started offering clients access to bitcoin funds and in May Wells Fargo announced it would introduce a cryptocurrency fund.

Just yesterday, CoinDesk reported that investment banker Ken Moelis started looking into the crypto space as a potential business opportunity.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.