On 18th January, a letter was released by The US Securities and Exchange Commission (SEC), targeted at two Wall Street trade groups who have previously made reference to their interest in opening mutual funds and ETF’s based on Bitcoin.

The letter reiterates the point that businesses who are offering investment products based on cryptocurrencies are not working in compliance with SEC regulations. Penned by Dalia Blass, the SEC’s director of investment management, the letter states that while there may be some benefits when using cryptocurrencies, there are also numerous concerns over trading, valuation and transparency of information. Dalia then listed a number of questions that the SEC want answers to before they even consider backing digital currencies.

Earlier this month, the SEC requested that two ETF proposals, which were related to Bitcoin were to be removed. Their latest position regarding Bitcoin-based funds appears to be hostile until the SEC’s questions which were dictated in the letter are addressed.

The letter concluded by saying that the SEC doesn’t support funds that require cryptocurrency investment and confirmed that they have requested that any sponsors who have filed registration statements, to withdraw them.