SEC Calls Bitcoin “Highly Speculative” With “Potential For Fraud”
DAVID DIERKING, 12 May 2021
It was thought that with the installation of the Biden administration we’d be looking at a more regulatory-friendly environment for cryptocurrencies. Multiple appointees to his staff have openly expressed at least a willingness to allow for greater acceptance of cryptocurrencies.
It looks like we may not be any closer after all. On Tuesday, the SEC’s Division of Investment Management issued a statement regarding mutual funds taking positions in bitcoin futures. Keep in mind that this is the same bitcoin futures market that many thought was going to clear the path for an eventual bitcoin ETF approval since dozens of ETFs already invest in futures contracts.
In the statement, the SEC makes pretty clear that its concerns over a lack of oversight and the potential for investors to be damaged are still very much alive.
One could argue that the statement calling bitcoin a “highly speculative investment” is more legal jargon than taking a potshot at cryptocurrencies. The fact that the statement specifically calls out the “lack of regulation” and the “potential for fraud of manipulation” seems like more than just prospectus-speak. It sounds more like the SEC making its opinion of bitcoin quite clear.
