It’s cryptocurrency hedge funds’ turn in the regulatory spotlight. The US Securities and Exchange Commission (SEC) will examine dozens of cryptocurrency hedge funds, which are known for their risky trading strategies and higher fees versus traditional investment funds. Regulators want to make sure as many as 100 crypto hedge funds are delivering what they promise to investors, according to a report in The Wall Street Journal.
Private hedge funds are not new to SEC scrutiny, as the sophisticated trading strategies have kept them on the radar of regulators before. For instance, fund managers must be careful how they market their funds, as the novice investor might not understand the risks they are inheriting with such trades.One popular strategy is long/short, in which fund managers bet both on the prospects of a stock’s rise and its decline, adding layers of debt to the trade.
Full article: https://www.ccn.com/wall-street-regulator-to-prod-cryptocurrency-hedge-funds/