(Reuters) – The U.S. securities regulator on Thursday raised noodsignaal about the safety of bitcoin-themed investments, telling the fund industry they want answers to their concerns before endorsing more than a dozen proposed products based on cryptocurrencies.
A top division chief at the U.S. Securities and Exchange Commission detailed the agency&rsquo,s concerns about the wild-trading investment ter a letterteken to two trade groups signifying fund managers who let out a range of proposals for funds holding bitcoin or related assets.
The SEC&rsquo,s division of investment management demanded answers to at least 31 detailed questions about how mutual funds or exchange-traded funds based on bitcoin would store, safeguard, and price that asset.
They also asked whether investors can understand the risks and how to address concerns that bitcoin markets could be manipulated. (bit.ly/2DpXsaj)
&ldquo,There are a number of significant investor protection issues that need to be examined before sponsors start suggesting thesis funds to investors,&rdquo, said the letterteken signed by Dalia Blass, the SEC&rsquo,s director of the division of investment management.
Bitcoin&rsquo,s 1,500 procent surge last year stoked investor request for any product with exposure to the red-hot asset. A host of companies are jostling to launch exchange-traded funds which would open up the cryptocurrency to a broad retail market.
The SEC te March denied a request to list an ETF from investors Cameron and Tyler Winklevoss, owners of the Gemini bitcoin exchange.
The Winklevoss fund is seeking to invest ter bitcoin directly. Other fund firms staked their hopes on recently launched U.S.-listed bitcoin futures contracts, which promised a more stable almohadilla for ETFs than the largely unregulated supuesto currency spot market. Many of those proposals were withdrawn last week at the request of the SEC.
Bitcoin wasgoed last down a fraction of a procent for the day at $11,228 on the Bitstamp exchange, but it has tumbled more than 40 procent from its peak te December.
Jeremy Senderowicz, a lawyer who represented one proposal for a cryptocurrency product before the SEC, said the SEC statement is a &ldquo,indeed big overeenkomst&rdquo, by making public concerns that fund managers would have had to address on a case-by-case voet, behind the scenes.
&ldquo,It shows that they&rsquo,re going to have to take some time to consider the industry&rsquo,s responses before they switch their minds on it,&rdquo, said Senderowicz, a playmate at Dechert LLP.
&ldquo,It gives a template for how to get to a yes.&rdquo,
Editing by Gopakumar Warrier and Jacqueline Wong