SEC’s Chair, Gary Gensler Warns Against Investing In Risky Crypto Assets Could This Signal An Approval?

SEC’s Chair, Gary Gensler Warns Against Investing In Risky Crypto Assets Could This Signal An Approval?
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    The Sec`s Chair warning coming two days before the approval date for Bitcoin ETFs has made enthusiasts call it an “I’ll warn you for the last time” kinda post.

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    The application for bitcoin spot ETFs by top institutional fund managers  was one of the biggest news to hit the  crypto industry since 2022 because a Bitcoin ETF would offer a simpler avenue for traditional institutional investors to access the world’s leading digital asset

    As many asset managers await the final decision on their spot exchange-traded fund applications, United States Securities and Exchange Commission Chair Gary Gensler through his X account warned his X followers about the risk that may be involved in trading cryptocurrencies.

    Read Also: When Should I Use Crypto Loans

    In an X post on January 8th, Gensler urged cryptocurrency investors to consider certain factors. The SEC chair highlighted concerns that asset managers might not be adhering to federal securities laws when providing crypto investment products, emphasizing the exceptionally risky and often volatile nature of the crypto market.

    “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.

    His post on X

    The timing of this 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.

    Could This Be A Sign?

    Although The SEC chairman was careful to not drop a hint as to whether he would approve or reject spot Bitcoin ETFs in the coming days, many crypto enthusiasts believe this might just be an “I’ll warn you for the last time” approval post.

    Over the last ten years, the SEC has constantly denied every Bitcoin spot ETF application, citing the potential for market manipulation in the BTC market as its main reason.

    This however changed 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.

    Although the commission still has the option to deny these applications, it would need to do so for different reasons than it previously used for other ETFs. Prominent ETF analysts at Bloomberg have however raised their estimates for the launch of U.S. spot bitcoin ETFs in January to 95%. 

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