Cryptocurrency : Why the SEC Issued a Warning to Bitcoin Futures Investors






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

The newsletter called “Funds Trading in Bitcoin Futures” is part of a long list of these articles dedicated to cryptocurrencies and digital assets.

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

The SEC classified these schemes as illegitimate investments and claimed to be concerned about scammers using Bitcoin to commit or facilitate this scam. Furthermore, the SEC claimed that the exchange platform could also be part of the illegal scheme.

Despite the publication date, apparently not much has changed for the Commission, as its latest cartoon on BTC states the following:

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

Bitcoin attack for more FUD

The SEC clarifies that BTC has been 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 states that all platforms that offer this product to US citizens must meet certain legal requirements. Caitlin Long, part of the Wyoming State Blockchain Select Committee, said:

The SEC is issuing this warning to investors about onshore exchanges, which offer only about 2.5x leverage, imagine how you view overseas exchanges offering> 100x leverage.

At the time of writing, BTC is trading at $ 36,872 with sideways movement on the 1 and 24-hour charts. In the derivatives sector, financing rates on exchange platforms have gone from positive to negative and vice versa in recent days.


BTC with small losses on the daily chart. Source: BTCUSD Tradingview

Therefore, the general sentiment in the market seems to be following the price action; there is no clear direction. In the short term, BTC should regain the higher area around current levels and push towards the $ 40,000 price mark.

The SEC and other officials from the US government and federal entities have been hitting the market with many negative announcements. From the SEC bulletin to State Department statements about a BTC ransom recovered from hackers. The market has been susceptible to this news but seems more insensitive to its effects.

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