Bitcoin futures rallied on Friday as the US Securities and Exchange Commission (SEC) issued a warning that the cryptocurrency is vulnerable to government action.
The SEC said it is concerned about “virtual currencies that use an algorithm to manipulate prices and that can move in ways that may cause financial harm to consumers.”
The SEC has already taken a series of actions to limit the use of bitcoin and other cryptocurrencies, and it is the latest in a long list of regulators and companies that have voiced concern about the volatile asset.
The US Securities & Exchange Commission said it has taken actions to restrict the use and trading of virtual currencies including:”We have taken additional actions to ensure that the issuance of virtual currency by issuers is regulated, that issuers have adequate technical expertise, and that issuer data is available to regulators.
The SEC is also working with law enforcement and regulatory authorities to develop policies that would address the risks posed by these virtual currencies.”
The statement said the SEC is continuing to evaluate the risks associated with virtual currencies, including “whether they may pose a risk to financial stability, the ability of consumers to transact with others and the availability of other forms of financial services.”
The SEC will continue to monitor the development of virtual and other cryptocurrency markets.
“It added that it is “monitoring developments in these markets and will continue its work with regulators, as appropriate, to ensure the security of our customers and the market structure of virtual exchanges.
“Earlier on Friday, the SEC said bitcoin futures futures had rallied almost 4 per cent on Friday on the news that it has issued a new set of rules aimed at curbing the use, trading and value of virtual coins.
The move comes after the SEC and the US Justice Department issued a joint warning that virtual currencies could pose a serious risk to the financial system and that regulators are considering “potentially significant restrictions” on the virtual currency markets.
The Securities & Exchanges Association (SEC), which represents US exchanges, said it was pleased that the agency has made a strong commitment to ensure its financial systems are robust and robust regulatory oversight of the virtual currencies market is in place.”
We are hopeful that the actions we are taking today will continue the momentum in the market and spur continued activity and investment in virtual currency derivatives,” it said in a statement.”
In the months ahead, we are working to develop regulatory policies that will further reduce the risks of virtual asset trading and the manipulation of prices.
“On Wednesday, the Securities and Exchanges Commission (S&E) issued its final warning, saying virtual currencies are unregulated and that they pose a significant risk to investors.
The warning was issued as the SEC has been examining the potential use of virtual trading platforms and services and is considering potential restrictions on those platforms and their use.
The agency said it had been monitoring “virtual market activity for a period of time,” but had not seen any “clear evidence” of any illegal activity.
The announcement came on the heels of a number of recent moves by the SEC, including the release of its new virtual currency guidelines, a crackdown on the use or trading of bitcoin derivatives and an order to halt the trading of bitcoins for two months.
The Federal Reserve is expected to make its final statement on virtual currencies next week.