Merrill Lynch has blocked clients and financial advisers who trade on their behalf from buying bitcoin, citing concerns over the cryptocurrency’s investment suitability.
The ban applies to all accounts and precludes the firm’s roughly 17,000 advisers not only from pitching bitcoin-related investments but also from executing client requests to trade the Grayscale Investment Trust bitcoin fund, according to a person familiar with the matter. The ban extends an existing policy barring access to newly launched bitcoin futures.
Existing positions in the bitcoin fund can be maintained in brokerage accounts, but not in fee-based advisory accounts, the person said. The brokerage arm of Bank of America Corp. BAC, -0.33% put the policy into place Dec. 8, right before the launch of the first U.S. bitcoin futures, the person said.
“The decision to close GBTC to new purchases is driven by concerns pertaining to suitability and eligibility standards of this product,” according to an internal memo reviewed by The Wall Street Journal, referring to the Grayscale’s fund’s trading symbol.
An expanded version of this report appears on WSJ.com.
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