MA Regulator Says Bitcoin Fails “To Pass The Smell Test”

Bitcoin has found another naysayer. This time, Massachusetts’ top securities regulator has issued a warning on the digital currency, calling it “entirely speculation.”

“It doesn’t pass the smell test,” William Galvin, secretary of the Commonwealth of Massachusetts, said Wednesday on CNBC. “There is no product here. This is entirely speculation. That’s already been proven by the high gyrations of the value. It’s also subject to manipulation, because no one can explain it [and] no one can control it.”

Bitcoin has soared more than 1,500 percent over the last 12 months to near $15,340 on Wednesday, and it hit a record high above $19,800 in mid-December.

But earlier this month, Galvin issued a statement listing seven reasons why bitcoin may be a “worthless product.” In addition, federal regulators have increased their warnings on cryptocurrencies.

Chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, issued a statement on Dec. 11 about the dangers of investing in cryptocurrencies and initial coin offerings. And last Thursday, the Financial Industry Regulatory Authority (FINRA) issued an investor alert on “cryptocurrency-related stock scams.”

“Don’t be fooled by unrealistic predictions of returns and claims made through press releases, spam email, telemarketing calls or posted online or in social media threads,” the alert said. “These actions may be signs of a classic ‘pump and dump’ fraud.”

Despite the negative press, many believe blockchain will change the world as much as the internet did. CME Group, the world’s largest futures exchange, and its competitor Cboe Global Markets both launched bitcoin futures in December, with many expecting the futures to help legitimize bitcoin as an asset class.