United States Securities and Exchange Commission (SEC) Chair Gary Gensler issued a warning to crypto investors on X (formerly Twitter).
United States Securities and Exchange Commission (SEC) Chair Gary Gensler issued a warning to crypto investors on X (formerly Twitter), as many asset managers await the final decision on their spot Bitcoin exchange-traded fund (ETF) applications.
In a thread on January 8, Gensler urged investors to be cautious and aware of the risks associated with cryptocurrencies. He emphasized that "crypto asset investments/services may not be complying w/ applicable law, including federal securities laws." He further stated that crypto can be "exceptionally risky" and "often volatile," citing examples of crypto projects or tokens that have lost value or become bankrupt.
Gensler also highlighted the prevalence of fraud in the crypto industry, stating that fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams. He cited examples such as "bogus coin offerings, Ponzi & pyramid schemes, & outright theft where a project promoter disappears w/ investors’ money."
The SEC chair's remarks came just hours after several spot Bitcoin ETF issuers filed amended S-1 applications with the commission. These filings are one of the final steps in the approval process for crypto ETFs in the United States.
Asset managers including Valkyrie, WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, ARK Invest and 21Shares, Fidelity, Bitwise and Franklin Templeton have all submitted applications for spot Bitcoin ETFs.
The SEC has been considering applications for spot Bitcoin ETFs for several years but has yet to approve any. The agency has expressed concerns about the volatility of Bitcoin and the potential for manipulation in the spot Bitcoin market.
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