Merrill Lynch has banned its financial advisors and clients from trading in Bitcoin, a Merrill Lynch spokeswoman has confirmed.

Merrill Lynch has banned its roughly 17,000 advisors not only from pitching cryptocurrency investments, but also from executing client trade requests in the over-the-counter Grayscale Investment Trust Bitcoin fund, which was first reported by The Wall Street Journal. The ban includes the Merrill Lunch Investment Advisory Program, any legacy programs and dual-contract programs, a Merrill Lynch spokeswoman said.

Merrill Lynch customers with self-directed accounts are also banned from buying positions in the Grayscale Investment Trust Bitcoin fund, due to “concerns pertaining to suitability and eligibility standards,” the wirehouse said in a memo first obtained by the WSJ.

The ban has been in place since Dec. 8, prior to the launch of Bitcoin futures, Merrill Lynch confirmed. The prohibition extends an earlier policy barring trades in newly launched bitcoin futures.

Bitcoin, which was trading at close to $20,000 in December, nosedived to $15,000 as of Wednesday.

Merrill Lynch is still allowing brokerage accounts to hold positions in Bitcoin, but not fee-based accounts.

In other words, the firm does not believe the investments will withstand regulatory or legal challenges, a former SEC attorney, who asked for anonymity, told Financial Advisor magazine. “There is no way Bitcoin meets the fiduciary smell test. It would be indefensible. These products are much more speculation than investments and definitely not investments that meet any fee-based portfolio parameters Merrill or any firm I know of have in place,” the attorney said.

Cryptocurrencies, initial coin offerings and their other derivatives violate b-ds’ written risk policies, the lawyer added.

The Merrill Lynch ban extends an existing policy barring access to all newly launched bitcoin futures that was put in place last fall.

While some brokers have complained the ban stops them from meeting investors’ demand for Bitcoin investments, more prudent brokers and investment advisors say the ban tracks their own aversion to the wildly speculative products.

“I think the ban is very prudent on Merrill Lynch’s part,” said Anthea Perkinson, founder of Monterey Associates, Pelham, N.Y.

“This is more speculation than investment and there is no way to do proper research or gauge the risk. It’s very interesting to read about cryptocurrencies and it has all the appeal of Powerball but it does not seem to be a great investment for clients,” said Perkinson, who is chairman of the Board of the FPA of New York.

“That said, I have one client who is dabbling in it,” added Perkinson. “He knows I’m on record saying that it’s going to end in tears, but he just finds it fascinating and loves the rush. We’ll see how it goes,” the veteran RIA said.

Merrill is the latest wirehouse to ban Bitcoin. The list of other firms that have banned Bitcoin futures trading include Citigroup, JP Morgan, Raymond James, UBS Group and Royal Bank of Canada.

JP Morgan CEO Jamie Dimon called Bitcoin a fraud in October: "If you're stupid enough to buy it, you'll pay the price for it one day," Dimon said at an investor conference last year, while admitting that his daughter had bought Bitcoin “and now she thinks she’s a genius.”

SEC Chairman Jay Clayton and Commissioners Kara M Stein and Michael S. Piwowar warned investors Thursday that losses in the cryptocurrency marketplace—even those due to fraud -- may be unrecoverable.

“The SEC and state securities regulators are pursuing violations, but we again caution you that, if you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment,” the SEC officials said in a joint statement.

On Thursday, the North American Securities Administrators Association (NASAA) issued the second of two investor warnings about cryptocurrencies in a month.

“The recent wild price fluctuations and speculation in cryptocurrency-related investments can easily tempt unsuspecting investors to rush into an investment they may not fully understand,” NASAA President Joseph P. Borg said.

 “Cryptocurrencies and investments tied to them are high-risk products with an unproven track record and high price volatility. Combined with a high risk of fraud, investing in cryptocurrencies is not for the faint of heart,” Borg added.

A NASAA survey of state and provincial securities regulators shows 94 percent believe there is a “high risk of fraud” involving cryptocurrencies. Regulators also were unanimous in their view that more regulation is needed for cryptocurrency to provide greater investor protection.

Last month, NASAA identified Initial Coin Offerings (ICOs) and cryptocurrency-related investment products as emerging investor threats for 2018.

The SEC’s Clayton and both commissioners commended NASAA for continuing to highlight the risks with cryptocurrency investments.

The NASAA alert “reminds investors that when they are offered and sold securities they are entitled to the benefits of state and federal securities laws, and that sellers and other market participants must follow these laws. Unfortunately, it is clear that many promoters of ICOs and others participating in the cryptocurrency-related investment markets are not following these laws,” the SEC officials said in their joint statement.