SEC and CFTC warn of risks in Bitcoin futures investments

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) warned retail investors about the risks of investing in futures on the first cryptocurrency.

“Investors should consider Bitcoin’s volatility and its futures market, as well as the lack of regulation and the possibility of fraud or price manipulation,” the statement said.

Regulators labeled investments in digital gold as ‘highly speculative’ and urged investors to ‘carefully weigh the risks’ of crypto investing.

“All investments in funds carry the risk of financial losses, which may be exacerbated for positions in Bitcoin futures due to high volatility,” the agencies added.

The SEC and CFTC noted that the shares of funds investing in the first cryptocurrency may not reflect the value of digital gold.

Earlier, the U.S. Securities and Exchange Commission warned about the risks of futures on “extremely speculative” Bitcoin.

SEC Chair Gary Gensler urged regulators to protect investors, and Congress to cooperate in regulating cryptocurrency exchanges.

In June, the CFTC doubted the legality of DeFi derivatives markets.

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