U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has issued warnings about crypto investing amid soaring anticipation for potential spot bitcoin ETF approvals. The SEC chief stressed that crypto investors “should understand they may be deprived of key info” and “other important protections” in connection with their investment.
Gary Gensler’s Crypto Warnings
The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, raised concerns about investing in crypto assets in a series of posts on social media platform X Monday. His warnings came amid heightened anticipation for spot bitcoin exchange-traded fund (ETF) approvals.
“Some things to keep in mind if you’re considering investing in crypto assets,” the SEC chief began. Firstly, Gensler warned, “Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws,” elaborating:
Investors in crypto asset securities should understand they may be deprived of key info & other important protections in connection w/ their investment.
Secondly, the SEC chairman stressed: “Investments in crypto assets also can be exceptionally risky & are often volatile. 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.”
Moreover, Gensler cautioned: “Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams. 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 is expected to make a decision on spot bitcoin ETFs by Wednesday, the deadline for a proposal by Cathie Wood’s Ark Invest and 21shares. Some people on social media view the timing of Gensler’s crypto warnings on Monday as a sign that the SEC is about to approve spot bitcoin ETFs. “Tell me you’re about to approve the bitcoin ETFs without telling me you’re about to approve the bitcoin ETFs,” Eric Weiss commented. Ten spot bitcoin ETF applicants have filed their final amended registration statements with the SEC.
Gensler has long been criticized for taking an enforcement-centric approach to regulating the crypto industry. Several U.S. lawmakers are seeking to remove him as the chairman of the securities watchdog. Over the weekend, the SEC issued a warning about fear of missing out (FOMO).