Morgan Stanley’s Bitcoin ETF Launch Could Trigger Major Regulatory Review

Chief John Reed Stark, former SEC Internet Enforcement, has cautioned Morgan Stanley against offering spot Bitcoin ETFs to clients.

Stark criticized the move, suggesting it could lead to an unprecedented SEC and FINRA examination. Last week, Morgan Stanley, a major U.S. financial institution, began providing BTC ETFs, marking a key step for institutional crypto adoption.

Stark described the decision as risky, stating that the bank’s 15,000 brokers pitching Bitcoin could invite intense regulatory scrutiny.

He noted that regulators would thoroughly review all Bitcoin transaction records, potentially uncovering violations. Stark ended his warning with a sarcastic “good luck” to the bank’s compliance team.

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Crypto Expert Predicts Massive Bull Run on the Horizon

On August 2, Morgan Stanley allowed its advisors to offer Bitcoin ETFs from BlackRock and Fidelity to wealthy clients.

Following this, Bitcoin ETFs saw significant inflows, with IShares alone adding 2,641 BTC, valued at $159.57 million, bringing its total to approximately $21 billion.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.