Wall Street banks are warning about the dangers of bitcoin futures.
The Futures Industry Association, which represents big banks and brokers, has warned U.S. regulators that the risks of trading bitcoin futures contracts have not been properly studied.
In an open letter to the U.S. Commodity Futures Trading Commission, the FIA said that the speedy certification of bitcoin futures does "not allow for proper public transparency and input."
The Chicago Mercantile Exchange and the Chicago Board Options Exchange plan to start listing the contracts later this month. The Nasdaq will launch its own bitcoin futures in 2018.
Analysts say that announcements from the exchanges have helped propel bitcoin prices to new heights, because the moves were seen as signs that big mainstream investors are becoming interested.
Bitcoin prices have gained over $4,000 in the past 48 hours to smash through $16,000.
The FIA, which counts Goldman Sachs and Morgan Stanley among its members, is concerned that exchanges regulated by the CFTC have been allowed to "self-certify" their new bitcoin contracts.
The decision will leave regulators with limited time to review futures offerings.
The FIA said that a "more thorough and considered process" would have allowed exchanges and clearinghouses more time to study trading limits and other ways to protect against price swings.
The group is worried that its members, which act as intermediaries between buyers and sellers, could be left holding the bag if something goes wrong.
"The recent volatility in these markets has underscored the importance of setting these levels and processes appropriately and conservatively," the group said in its letter.
"We remain apprehensive with the lack of transparency and regulation" of bitcoin and "whether exchanges have the proper oversight to ensure [bitcoin is] not susceptible to manipulation, fraud, and operational risk," it said.
The CFTC has itself warned investors about the dangers of bitcoin, noting that cryptocurrency exchanges are largely unregulated and outside the agency's purview.
"Bitcoin ... is a commodity unlike any the commission has dealt with in the past," CFTC chairman J. Christopher Giancarlo said in a statement on December 1.
"Investors should be aware of the potentially high level of volatility and risk in trading these contracts," the agency added.
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