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During the fall in the price of Bitcoin, which caused this Musk’s tweet, the US Securities and Exchange Commission (SEC) is coming up with a warning.
The SEC warns of BTC volatility
US Securities and Exchange Commission (SEC) in his new declaration warns investors against the risks of investing in the world’s leading cryptocurrency. The SEC has concerns about mutual funds in bitcoin futures. The warning concerns the volatility and speculative nature of the digital currency.
The SEC appears to be of the opinion that some investors, incl. Institutions that have chosen cryptocurrencies do not understand what they are investing in. It states:
“Investors should understand that Bitcoin, including gaining exposure in the bitcoin futures market, is a highly speculative investment.
As such, investors should take into account the volatility of Bitcoin and bitcoin futures markets, as well as the lack of regulation and the potential for fraud or manipulation of the underlying bitcoin market. “
Investor protection
The SEC has issued a warning as mutual funds seek to acquire Bitcoin. Commissioner Hester Peirce herself has previously done so she statedthat, for investor protection, it would be better for the SEC to adopt bitcoin ETFs, as the absence of these regulated products leads to the selection of less secure options for investing in BTC.
Nevertheless, now the staff of the SEC Department of Investment Management (IM) notes that the commission “It will closely monitor the impact of mutual fund investments in bitcoin futures on investor protection, capital formation and fairness and market efficiency.”
The IM further recommends that only mutual funds that have risk mitigation strategies in place in the sector should attempt to enter the bitcoin futures market. In addition, those funds wishing to gain exposure to the cryptocurrencies and derivatives market should issue risk warnings to their clients.
Market intervention
An indirect part of the warning is a recent horror statement from cryptoinvestors. The SEC will again drop “bombs” on cryptors and detonate some investors’ investments.
Last week, Gary Gensler, the newly appointed SEC chairman, said believes that Many cryptocurrencies that are currently on the market are in fact securities. He also added that the commission has the power to make this decision – that is, to selectively decide “who Pešek will bang.”
“I think to the extent that something is a security, the SEC has great authority, and a lot of cryptocurrencies are really securities. The previous chairman stated that [a] the previous SEC filed a number of coercive measures to introduce some of these securities tokens or investment contracts into the rules. “
Conclusion
A new SEC warning points out that Bitcoin is highly volatile compared to other assets. The Commission targets and discourages mutual funds interested in Bitcoin from making this decision, or will require funds to issue warnings to their clients. In addition, the chairman of the commission Gensler says we can expect further cases of accusations by the creators of some cryptocurrencies in connection with the unauthorized offer of securities.
To date, neither the Commission nor the US Government has provided a clear regulatory provision that would bring much-needed regulatory clarity and help safely determine which criteria will be taken into account in the assessment.
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