With the U.S. Securities and Exchange Commission (SEC) expected to approve a Bitcoin ETF soon, Chairman Gensler reminded investors of the risks involved in cryptocurrency investments.
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has issued a cautionary advisory on crypto asset investments ahead of the highly anticipated deadline for approval of a spot bitcoin exchange-traded fund (ETF).
In a Jan. 8 post on social media platform X, formerly known as Twitter, Gensler highlighted the risks of investing in cryptocurrencies, citing regulatory noncompliance, price volatility, and potential for fraudulent activity as major concerns.
Gensler warns against cryptocurrencies
Gensler noted that some entities offering cryptocurrency investments may not comply with relevant laws, potentially leaving investors without critical information and other safeguards needed to make informed decisions.
Gensler stated, “Institutions that offer crypto-asset investments/services may not be in compliance with applicable laws, including federal securities laws. Investors in crypto-asset securities should understand that they may lose critical information and other safeguards when investing.”
The chief regulator further emphasized the high risk and volatility of crypto assets, noting instances of crypto platform crashes and sharp drops in digital asset prices.
Additionally, he expressed alarm over the spread of fraud within the crypto space, including fraudulent token offerings, Ponzi and pyramid schemes, and cases where project promoters disappear with investor funds.
At the same time, Gensler’s statement is not entirely surprising, considering his stance on the industry since taking office. Under Gensler’s leadership, the SEC committee has filed several cases against major crypto companies such as Coinbase and Binance, alleging that their operations violated securities laws. In addition, the regulator has labeled large cryptocurrencies such as Solana, Cardano, and Polygon as crypto security tokens in many legal actions.
However, his warning echoes earlier warnings from the SEC’s Office of Investor Education, which warned retail investors about the risks of various crypto assets, including memecoins and NFTs.
The timing of these warnings has fueled speculation in the crypto community that regulators could approve a spot Bitcoin ETF.
Earlier today, several potential ETF issuers, including Grayscale, BlackRock, and Bitwise, adjusted their applications, mainly adjusting product management fees to attract potential investors. The report also said that the probability of the SEC rejecting the spot Bitcoin ETF has dropped to only 5%. #比特币ETF #投资警告
