SEC Issues Staff Statement on Registered Funds Investing in the Bitcoin Futures Market

The SEC’s Division of Investment Management (the “Division”) has issued a staff statement urging investors to use caution when investing in a mutual fund with exposure to the Bitcoin futures market.

Specifically, the Division staff notes that investors should (1) recognize that Bitcoin is a “highly speculative investment”; (2) “consider the volatility of Bitcoin and the Bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying Bitcoin market”; and (3) “focus on the level of risk they are taking on, and the level of risk they are comfortable taking on, prior to making an investment.”