Home News Bank of America’s Merrill Lynch Bans Clients from Bitcoin Fund

Bank of America’s Merrill Lynch Bans Clients from Bitcoin Fund

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Bank of America’s brokerage arm Merrill Lynch has barred clients and their financial advisers from participating in bitcoin investments.

The Wall Street Journal, upon reviewing an internal memo by Merrill Lynch, reports that the brokerage arm has specifically highlighted Grayscale’s Bitcoin Investment Trust, a open-ended trust fund directly invested in the world’s first cryptocurrency. The fund is run by Grayscale Investments led by Barry Silbert, a former Wall Street investment banker turned prolific bitcoin entrepreneur and industry investor.

An excerpt from the internal memo read:

“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product.”

The ban reportedly applies to Merrill Lynch’s 17,000 advisers, keeping them from suggesting bitcoin-related investments and refusing client requests to trade in the Siulbert’s fund. Existing positions by clients in the bitcoin fund will be allowed in basic brokerage accounts, a WSJ source added, but not in fee-based advisory accounts where financial advisers suggest and pitch investments. A Merrill Lynch spokeswoman confirmed the ban, stating it applies throughout the firm and will include self-directed accounts.

The policy came into effect on December 8th, prior to the launch of the first bitcoin futures in the United States.

For Silbert, Merrill Lynch’s decision comes as a surprise as the bitcoin mogul claimed he is unaware of any brokerage firms implementing similar bans.

In an email to Reuters, Silbert said:

“We look forward to speaking with Merrill Lynch and addressing any questions or concerns they have about the Bitcoin Investment Trust. We are unaware of any similar policies at other brokerage firms.”

Traditional Wall Street banks and brokerages have been hesitant when it comes to cryptocurrencies, even as major financial institutions like the CME Group and CBOE began trading bitcoin futures contracts in December. Prior to the launch of the bitcoin futures markets, the likes of Citigroup, Bank of America and others blocked clients from investments.

In the days following the launch, CBOE’s chief executive dismissed complaints from the Futures Industry Association (FIA), an influential Wall Street lobby group comprising of the likes of JPMorgan Chase and Goldman Sachs, delivered to the US Commodity Futures Trading Commission in a letter. The letter was labelled as a “cheap shot” by CBOE’s chairman and CEO Edward Tilly, adding it “uncalled for.”

Featured image from Shutterstock.

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Source: cryptocoinsnews.com

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