Cryptocurrency News

Why Did the SEC Issue a Warning to Bitcoin Futures Investors?

The US Securities and Exchange Commission (SEC) has issued another warning bulletin for bitcoin investors.. In particular, the Commission has warned of the dangers for BTC futures traders and asked them to “carefully weigh the potential risks and benefits of investing”.

bulletin Called “Fund Trading in Bitcoin Futures” is part of a longer list of articles devoted to cryptocurrencies and digital assets.

The first was published on 23 July 2013, and was titled “Investor Alert: Ponzi Schemes Using Virtual Currency”. In this article, the commission warns investors about Bitcoin And explains in detail the features of a Ponzi scheme, a type of scam where existing participants receive payments from new contributors.

seconds Classified these schemes as non-legitimate investments and claimed concern about fraudsters using bitcoin to commit or facilitate this scam. Furthermore, the SEC claimed that the exchange platform could also be part of an illegal scheme.

Despite the date of publication, apparently not much has changed for the commission as their latest bulletin on BTC claims the following:

Investors should consider the volatility of the bitcoin and bitcoin futures markets, as well as the lack of regulation and the potential for fraud or manipulation in the underlying bitcoin market.

Bitcoin Attack by More FUD

The SEC clarifies that BTC is classified as a commodity in the US Therefore, futures contracts must be traded with an entity “regulated and supervised” by the Commodities and Futures Trading Commission (CFTC).

The regulator claims that all platforms offering this product to US citizens must comply with certain legal requirements. Caitlin Long, part of the State of Wyoming Blockchain Select Committee said:

The SEC is issuing this investor warning re onshore exchanges, which only offer 2.5x leverage – just imagine how it views offshore exchanges offering >100x leverage.

At the time of writing, BTC is trading at $36,872 with a sideways movement on the 1-hour and 24-hour charts. In the derivatives sector, the funding rates on the exchange platform have gone from positive to negative and vice versa during the past few days.

BTC with a small loss in the daily chart. Source: BTCUSD Tradingview

Thus, the general sentiment in the market is following the price action; There is no clear direction. In the near term, BTC should retest the higher zone around the current levels and push towards the $40,000 price mark.

The SEC and other US government officials and federal entities are entering the market with a number of negative announcements. State Department statements on BTC ransoms recovered from hackers, from SEC bulletins. The market has been sensitive to this news but seems more impervious to their effects.

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