(Bloomberg) -- The U.S. securities regulator raised a series of investor protection concerns about cryptocurrency mutual and exchange-traded funds, the strongest sign yet that the world’s biggest market isn’t likely to see the products any time soon.

In a letter to two leading industry groups on Thursday, the Securities and Exchange Commission asked a number of questions on topics including the risks of manipulation, whether funds could accurately value the volatile products, and how they’d meet demands to redeem virtual currency.

It’s hardly the welcome that cryptocurrency enthusiasts were hoping for.

After Bitcoin futures started trading last month on CME Group Inc. and Cboe Global Markets Inc. exchanges, speculation grew that the SEC, which serves as a gatekeeper for individual investors in the U.S., would soon allow a range of crypto-ETF and mutual-fund offerings.

“There are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors,” Dalia Blass, who runs the regulator’s investment management unit, said in the letter.

Until the SEC’s questions were answered, the agency didn’t think it was “appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products,” she said.

Last week, several fund companies were told by the SEC to pull their registrations after the regulator’s staff said it was worried about protecting investors, people familiar with the matter said at the time.

The agency has slammed the brakes on at least a dozen proposed bitcoin ETFs and two cryptocurrency mutual funds that had tried to use a fast-tracked process to list the products.

In March, the SEC rejected a proposal to list an ETF backed by the Winklevoss twins, Tyler and Cameron, who are founders of bitcoin exchange Gemini. At the time, the regulator raised concerns that exchanges wouldn’t be able to conduct adequate surveillance of the underlying market.

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Bitcoin ETFs dealt setback as SEC underscores risk to investors

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