SEC Chair Issues Crypto Warning As Industry Awaits ETF Decision

Table of Contents

• Gensler Urges Investors To Exercise Caution 
• Crypto Markets Wait For Decision 
• Reading Too Much Into Comments? 

SEC Chair Gary Gensler has issued a stark warning about investing in volatile crypto assets, offering investors a few tips and “a few things to keep in mind.”

The remarks from Gensler come as the broader markets wait for the Securities and Exchange Commission’s decision about the spot Bitcoin ETF applications. 

Gensler Urges Investors To Exercise Caution 

Gensler posted the warnings on X (formerly Twitter), urging investors to be cautious when investing in crypto and mindful of the risks involved and the current regulatory landscape. In his post, Gensler stated that investing in crypto is incredibly risky thanks to high volatility and highlighted the fact that several crypto platforms had become insolvent or lost significant value. 

“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.”

He also added that companies that may be offering crypto asset services and investments may not be in compliance with applicable laws, including federal securities laws. 

“Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws. Investors in crypto asset securities should understand they may be deprived of key info & other important protections in connection w/ their investment.”

While Gensler did not mention anything about the proposed spot Bitcoin ETFs, the thread’s timing raised plenty of eyebrows in the crypto space. The comments from the SEC Chair came only hours after asset managers BlackRock, Ark Invest/21Shares, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie amended the S-1 forms in a move widely seen as the final one before a potential approval by the SEC. 

Crypto Markets Wait For Decision 

Meanwhile, the crypto market is waiting for a decision by the Securities and Exchange Commission. Exchanges, including Nasdaq, the NYSE, and Cboe, filed amended 19b-4 forms on Friday, putting the ball back in the SEC’s court. Should the forms be approved, trading can begin in a parallel process once the S-1 forms become effective. A decision by the SEC is expected shortly, primarily due to the January 10th deadline for the SEC to respond to the applications of Ark Investments and 21 Shares. 

However, analysts and market watchers are well aware of the fact that the SEC could simply delay its decision again. 

Reading Too Much Into Comments? 

While Gensler’s comments may have created some rumblings, the SEC Chair did not drop any hint about what he might be thinking, nor did he mention the upcoming ETF decision. His comments were in line with previous advisories and warnings he had given to individuals investing in crypto. Gensler had previously stated, 

“The U.S. Treasury market is a very consequential, very important market. Crypto securities are not only much smaller, it’s not how we fund our government. It’s not how we conduct monetary policy. And for many investors they’ve been harmed in that market. And they’re being harmed because there’s too much non-compliance. It’s not just non-compliance with securities laws. It’s non-compliance with a raft of other laws.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.