The SEC’s Office of Investor Education and Advocacy (OIEA) issued a warning about funds with exposure to Bitcoin futures

Not long ago, the head of the U.S. Securities and Exchange Commission (SEC) is doubling down on his call to regulating cryptocurrency exchanges. Recently, the SEC’s Office of Investor Education and Advocacy (OIEA) continues to warn about some of the risks associated with funds exposed to Bitcoin futures.

It seems that the SEC is doing its best to prevent investors from accessing cryptocurrency.

Office of Investor Education and Advocacy issued a warning about funds with exposure to Bitcoin futures

OIEA urges investors considering a fund with exposure to the Bitcoin futures market to weigh carefully the potential risks and benefits of the investment.

The agency states that investors can be vulnerable to fraud or manipulation in the underlying market. Among other things, investors should understand that Bitcoin, including gaining exposure through the Bitcoin futures market, is a highly speculative investment

The report stated:

“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 must consider factors such as the fund’s risk tolerance, risk disclosure, possible losses, and the difference between the spot and futures prices.

In addition, they also list out the things to consider about investing in a fund that buys or sells Bitcoin futures as follows:

  • The investor’s risk tolerance
  • The fund’s disclosure of its risks
  • Potential loss of the investment
  • The difference in investment outcome

In the end, they concluded:

“Funds that buy or sell Bitcoin futures may have unique characteristics and heightened risks compared to other funds. It is important to consider how any investment fits into your overall investment plan before investing.”

Back in May, the SEC urged Congress to bring regulatory clarity to cryptocurrency trading platforms while raising concerns over fraud and market manipulation.

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