Monday, April 22, 2024

    Merrill Lynch Bans Clients From Bitcoin Investment Trust

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    One of the Bank of America’s wealth management divisions, Merrill Lynch, has forbidden clients to invest in Barry Silbert’s Bitcoin Investment Trust. The news comes via a memo from the financial advisory firm last December which was seen by Reuters.

    The note was sent to around 17,000 brokers at both Merrill Lynch and their subdivision of independent trade managers, Merrill Edge. According to the memo dated December 8, 2017, the wealth management firm will no longer approve new orders for Silbert’s trust. This was due to uncertainty over the “suitability and eligibility standards” of the Bitcoin fund.

    The Bitcoin Investment Trust was founded in 2013 by the serial-digital currency entrepreneur Barry Silbert. It’s managed by Grayscale, a subsidiary of the Digital Currency Group, who also own CoinDesk. Silbert himself has also been heavily involved with the financing of several other digital currency ventures in recent years. These include Ripple and Coinbase, and BitPay.

    In response to the memo reported by Reuters, Silbert said via email:

     “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.”

    Prior to the December ban, those trading through Merrill Lynch and Merrill Edge could buy stakes in the Bitcoin Investment Trust. However, such privileges have been revoked for all but their clients with historic positions with the trust. Those who have fee-based advisory accounts have been forced to sell their holdings.

    The attitude of Merrill Lynch towards Bitcoin financial products should hardly come as a surprise. The Bank of America also refuse to offer their clients exposure to either the CBOE or CME Group futures markets that were launched late last year. Such policies represent a growing division within traditional financial institutions over how to treat Bitcoin. These differing stances between large banking and brokerage firms are likely to continue as further trading options become available in the future.

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