US SEC warns of Bitcoin Futures risks in mutual fund investments

Bitcoin Insurance Fund is a licensed insurance company that now offers insurance to digital asset holders, including BTC. With an experienced team of brokers and portfolio managers, BIF has a number of customized service offerings including plain vanilla BTC insurance, as well as more sophisticated tranche exposures where clients can take positions in certain price ranges.

The Commodity Futures Trading Commission officially released a report yesterday on the current state of cryptocurrency derivatives trading, as well as their recommended regulatory framework. The CFTC is particularly concerned with how cryptocurrency derivatives trading has become more widespread among retail investors, and therefore needs to be closely monitored.

The Securities and Exchange Commission urged investors to do their due diligence, weigh their risk appetite and examine the funds’ disclosures after they surged more than 200 percent this year. The agency also warned that the schemes can be “highly complex” with structures that may make them difficult to analyze. As said by Bloomberg, the U.S. SEC said:

“Investor protection and assessing the ongoing compliance of these funds is a top priority for the staff”. It further added that the agency “consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs.”

The capital market regulator has decided to conduct a regulatory review of three main sectors, including insurance companies, non-banking financial companies (NBFC) and stock brokers.

  1. The source of funds
  2. Failure of the company to register with the regulator
  3. Preliminary audit by chartered accountants

US SEC and the Bitcoin ETF agreement

The U.S. market has been eagerly waiting for the launch of the first Bitcoin ETF. Many big financial giants have already submitted their proposals to the U.S. SEC for approval, including companies such as Gemini, VanEck and SolidX Partners Inc., a New York-based blockchain company that develops software used to track data on virtual currencies and assets on behalf of hedge funds and other institutional clients. VanEck’s Bitcoin ETF is having a hard time making a mark on the crypto market. The U.S. SEC has delayed its decision for the approval of VanEck Bitcoin ETF to June end due to concerns about market manipulation, according to Bloomberg News.

While speaking at the Consensus Invest conference in New York, Gensler remarked that the regulatory framework for crypto exchanges and firms is too unclear at this point. He said:

The crypto exchanges are currently in a state of disarray and there is a need to make sure that they follow all the required protocols. He also called for more clarity on the regulatory front as it will help them become more streamlined.

NASDAQ CEO Adena Friedman commented on the current scenario of Bitcoin and alluding to a possible ETF approval in the U.S. The CEO stated that:“It’s not going to happen overnight, there are significant regulatory hurdles to getting an ETF approved, but it is something that’s actively being considered,” she said at CNBC’s Delivering Alpha conference in New York on Wednesday.

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