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Wall Street Concerned Over Bitcoin Future Trading


Wall Street's biggest banks and clearing houses have expressed concern over federal regulators granting approval for bitcoin future trading without adequate dialogue and precaution.

In an open letter sent to the Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo, the Futures Industry Association (FIA) said the decision was made too quickly and without properly weighing the risks involved in the virtual currency.

FIA includes Wall Street's largest banks, brokers and traders, including Bank of America Merrill Lynch, Barclays, BNP Paribas, Goldman Sachs, J.P. Morgan Securities, and Morgan Stanley.

Meanwhile, the Bitcoin Foundation has announced the appointment of a new core security auditor as part of its broader shift to focus on bitcoin core development.

Despite increased warnings of a price bubble, the value of bitcoin is soaring day-by-day. It fluctuated wildly this week, and crossed $19,000 briefly Thursday.

The most recent spike comes after CFTC gave permission to conduct bitcoin future trading on three established U.S. exchanges, providing the cryptocurrency with a greater level of credibility in the financial market.

Bitcoin futures will launch on the Chicago Board Options Exchange on Sunday, and on Chicago Mercantile Exchange, the world's largest futures exchange, a week later. The Cantor Exchange hasn't yet announced the date of trading.

In light of the CFTC and NFA's warnings, FIA called for a healthy dialogue between regulators, exchanges, clearinghouses and the clearing firms "who will be absorbing the risk of these volatile, emerging instruments during a default on bitcoin future trading".

Walt Lukken, CEO of Futures Industry Association, said the one-day self-certification process should be reviewed.

FIA also said there should have been a public discussion on whether a separate guarantee fund for future trade was appropriate or whether exchanges put additional capital in front of the clearing member guarantee fund.

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