SEC’s Gensler Warns Against Investing In Volatile, Risky Crypto Assets Ahead Of Landmark Bitcoin ETF Approval

JPMorgan Predicts SEC Will Be Forced To Greenlight Spot Bitcoin ETFs Following Grayscale’s Court Victory

The coming two days are one of the most highly anticipated in crypto history, as the U.S. Securities and Exchange Commission (SEC) could at long last approve a spot Bitcoin ETF.

With as many as 13 Bitcoin ETF issuers awaiting the regulatory greenlight, SEC chair Gary Gensler warned investors about getting into crypto assets on Monday.

In a post on X, Gensler reiterated that the crypto market is plagued by scams and fraud, and that many firms in the space “may not be complying” with securities laws.

“Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws,” the SEC boss said, advising his followers to keep some things in mind about cryptocurrencies. “Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams,” he continued.

While Gensler did not specifically mention spot ETFs, the timing of his post raised eyebrows among diehard crypto advocates as his remarks came approximately two hours after would-be BTC ETF providers, including BlackRock, Fidelity, Ark Invest, WisdomTree, and Invesco made their final amendments to their S-1 forms.

“Investments in crypto assets also can be exceptionally risky & are often volatile,” Gensler added on Jan.8. “A number of major platforms & crypto assets have become insolvent and/or lost value. Investments in crypto assets continue to be subject to significant risk,” he said, referring to digital asset exchanges and firms that imploded in 2022, including FTX, Terraform Labs, and Voyager Digital.

“Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams,” Gensler opined. “These investments continue to be replete w/ fraud- bogus coin offerings, Ponzi & pyramid schemes, & outright theft where a project promoter disappears w/ investors’ money.”

The SEC chairman didn’t seem to hint whether he would approve or reject spot Bitcoin ETFs in the coming days. His Monday comments echo previous warnings he’s offered to cryptocurrency investors.

Spot Bitcoin ETFs: Long-Awaited SEC Approval Nigh

A Bitcoin ETF would finally give traditional institutional investors a more uncomplicated way to gain exposure to the world’s largest cryptocurrency. Yet, the SEC has denied every proposal for such a product over the past decade, citing the potential for market manipulation in the BTC market as its main reason.

Last month, Gensler indicated that the SEC would take a “new look” at spot Bitcoin ETFs after a federal judge in August ordered the agency to revisit Grayscale’s application, arguing that the commission was “arbitrary and capricious” in rejecting the investment vehicle.

The SEC has an open window until January 10 in which it could give the nod to numerous applications simultaneously. Prominent ETF analysts at Bloomberg have raised their estimates for the launch of U.S. spot bitcoin ETFs in January to 95%. They previously assigned a 90% probability.

Meanwhile, most experts believe Bitcoin is primed to skyrocket even further upward after a Bitcoin ETF is green-lighted this month.

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