06/10/2021 | News release | Distributed by Public on 06/10/2021 14:19
CFTC/SEC Investor Alert: Funds Trading in Bitcoin Futures
The Securities and Exchange Commission's (SEC's) Office of Investor Education and Advocacy (OIEA) and the Commodity Futures Trading Commission's (CFTC's) Office of Customer Education and Outreach (OCEO) urge investors considering a fund with exposure to the Bitcoin futures market to weigh carefully the potential risks and benefits of the investment. Among other things, investors should understand that Bitcoin, including gaining exposure through the Bitcoin futures market, is a highly speculative investment. 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.
Bitcoin. Bitcoin is a digital asset, or an asset that relies on blockchain technology. Bitcoin has also been called a 'virtual currency' or a 'cryptocurrency.'
Bitcoin future. A Bitcoin futures contract is a standardized agreement to buy or sell a specific quantity of Bitcoin at a specified price on a particular date in the future. In the United States, Bitcoin is a commodity, and commodity futures trading is required to take place on futures exchanges regulated and supervised by the CFTC. |
Investors who are thinking about investing in a fund that buys or sells Bitcoin futures should carefully consider:
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.
This Investor Bulletin represents the views of the staff of the SEC's Office of Investor Education and Advocacy and CFTC's Office of Customer Education and Outreach. It is not a rule, regulation, or statement of the Securities and Exchange Commission or the Commodity Futures Trading Commission (the 'Commissions'). The Commissions have neither approved nor disapproved its content. This Bulletin, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it does not create any enforceable rights or new or additional obligations for any person.