The US Securities and Exchange Commission issued a letter dated January 18 for the purpose of two Wall Street trading groups interested in opening ETFs. and Mutual Funds based on Bitcoin (BTC). The letter argues that companies offering investment products based on cryptocurrency are not yet able to comply with SEC regulations.

Dalia Blass, Director of SEC Investment Management, wrote in the letter:

"We appreciate that cryptocurrency and related product advocates have identified a range of # 39; s potential benefits.We are also aware that critics of cryptocurrencies have raised various concerns regarding information transparency, trading, valuation and other issues related to the nature of the underlying assets. In light of these considerations, we have, at this time, important unanswered questions about how funds holding large amounts of cryptocurrencies and related products would meet the requirements of the law. 1940s and its rules. "

Mutual Funds, Closed End Funds, Hedge Funds, Private Equity Funds and holding companies.

The letter contains questions that the SEC believes should be answered so that they plan to support the idea of ​​a cryptocurrency-based company. funds. Blass writes that valuing cryptographic portfolios at the end of each day will be difficult due to market volatility and the nature of the Blockchain protocol:

"For example, how would they respond when the blockchain for a cryptocurrency diverges in different paths (ie, a "fork"), which could result in different cryptocurrencies with potentially different prices? "

The SEC also considers the Liquidity as a potential problem in the 1940 Act, a fund must be able to allow its investors to easily liquidate their holdings at the end of each day.

The risk of fraud and market manipulation, already raised in a SEC bulletin from August 2017 relationship with the Initial Coin Offeringings (ICO), is again repeated in this letter with respect to funds Exchange Traded Funds (ETFs).

In early January 2018, the SEC had requested the withdrawal of two ETF proposals relating to Bitcoin, citing the same concern about liquidity and valuation highlighted in the most recent letter.

The SEC's final position on the possibility of Bitcoin-based funds is currently unfavorable. Blass writes: