AMWatch

Bitcoin ETF sellers in Sweden urged to avoid average consumers

Sweden’s financial watchdog has told investment firms and banks to think twice before selling exchange-traded crypto-tracking products to average consumers.

Photo: Dado Ruvic/REUTERS / X02714

The Financial Supervisory Authority in Stockholm said it will take action against companies that sell the risky, complex instruments to retail investors who don’t understand what they’re getting into, according to a statement on Monday.

The FSA, which also opened the door to greater regulation for the area, said such instruments are "unsuitable for most, if not all, consumers."

Exchange-traded crypto-tracking products exist in Europe and a Bitcoin ETF opened in February in Canada. But in the U.S., regulators have so far fought them amid concerns over potential manipulation and liquidity.

The warning from Sweden’s financial watchdog comes amid a surge in the price of Bitcoin. Sweden is home to the largest Bitcoin exchanged-traded product: The USD 1.7 billion Bitcoin Tracker EUR, which invests in swap contracts to mirror the cryptocurrency’s returns, is listed on the Stockholm Stock Exchange.

Sweden’s FSA has previously warned about the risks of investing in crypto assets, but also acknowledged it has little power to supervise them.

The watchdog began its review of tracker instruments last year. While the market is subject to more regulation, the FSA said the current requirements don’t do enough to mitigate the risks buyers face.

When retail buyers of volatile instruments follow the market, "the risk of large losses increases," the FSA said.

Bitcoin tops USD 48,000 for the first time after Tesla's purchase 

Blackrock takes first step into crypto exposure in two funds 

Danes start new investment fund: Plan to trade cryptocurrencies from Cyprus 

More from AMWatch

SEB sees EU creating liquid secondary green bond market

With the EU bound to issue EUR 225bn worth of green bonds, this large amount of uniform issuances could help establish a secondary market for green bonds for the first time, SEB Denmark Head of Sustainability Lars Eibeholm tells AMWatch.

House of Reach: We enjoy working with smaller fund managers

Swedish advisor and incubator House of Reach moved into the Danish market just before 2021 kicked in. With a Finnish expansion and new team member soon in place, co-founder Fredric Andersén tells AMWatch the challenges institutions as well as asset managers are facing and why the firm has become more selective about partners.

Kirk Kapital grabs sustainability chief from Danske's new flagship fund

Danske Bank Asset Management has lost one of the analysts behind its analytical ESG data tool, Mdash, to Lego fortune manager Kirk Kapital. Danske's now-former investment professional also served as chief ESG analyst and senior portfolio manager of its new sustainable global equity fund, launched last year.

Further reading

Related articles

Latest news

See all jobs

Latest news from FinansWatch (dk)

Latest news from EnergyWatch

Latest news from ShippingWatch