Date
25 April 2018
Merrill Lynch financial advisors have been barred from pitching bitcoin-related investments for their clients. Photo: Bloomberg
Merrill Lynch financial advisors have been barred from pitching bitcoin-related investments for their clients. Photo: Bloomberg

Merrill Lynch bars trading of bitcoin fund, futures: WSJ

Merrill Lynch, the brokerage unit of Bank of America Corp, has barred clients and financial advisers who trade on their behalf from buying bitcoin, the Wall Street Journal reports.

Ciiting concerns over the cryptocurrency’s investment suitability, the financial giant ordered its roughly 17,000 advisers not to pitch bitcoin-related investments or execute client requests to trade the Grayscale Investment Trust bitcoin fund, the paper said. 

The policy was put in place on Dec. 8, right before the launch of the first US bitcoin futures, the report said, citing a person familiar with the matter.

Existing positions in the bitcoin fund can be maintained in brokerage accounts, but not in fee-based advisory accounts, according to the report.

“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product,” according to an internal memo reviewed by Journal, referring to the Grayscale fund’s trading symbol.

A spokeswoman for Merrill Lynch confirmed the decision, which applies across the firm and includes self-directed accounts, the paper said.

Grayscale’s Bitcoin Investment Trust is an open-ended trust that is invested exclusively in bitcoin and derives its value from the price of bitcoin.

It was created for investors seeking exposure to bitcoin through a traditional investment vehicle, and trades over the counter.

Merrill Lynch’s decision to ban trading in the bitcoin investment trust is the latest sign of Wall Street’s wariness over virtual currencies.

The US brokerage arm of UBS Group already bars its advisers from trading bitcoin-related products, according to the Journal.

Several other firms, including JPMorgan, Citigroup and Royal Bank of Canada, have told clients that they wouldn’t offer them access to the first bitcoin futures market when it went live Dec. 10.

Financial industry executives have expressed skepticism about the cryptocurrency’s long-term viability.

JPMorgan CEO Jamie Dimon, for one, has called bitcoin a fraud.

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RC

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