Former Chief of the SEC’s Office of Internet Enforcement John Reed Stark has shared his warning to Morgan Stanley over granting its clients access to spot Bitcoin ETFs.
In his latest post on X, SEC ex-official criticized the investment bank’s decision, suggesting that Morgan Stanley will likely be subject to “the largest SEC and FINRA examination sweep in history.”
Last week, Morgan Stanley, one of the largest financial institutions in the U.S., introduced BTC ETFs to its line of products. This marked an important milestone for the introduction of cryptocurrencies to institutional investors.
Compliance inspection imminent?
However, Stark described the firm’s move as a “death wish,” suggesting that by allowing its 15,000 brokers to pitch Bitcoin, the bank has opened itself up to intense regulatory scrutiny.
He warned that SEC and FINRA staff would have access to all records related to Bitcoin sales, making it easy to identify violations. Stark ominously concluded by wishing the bank’s compliance director “good luck.”
Largest inflows in months
On Aug. 2, Morgan Stanley gave the green light to its 15,000 financial advisors to start pitching clients with a net worth north of $1.5 million on the funds issued by BlackRock and Fidelity.
Related
According to Lookonchain, on Aug. 9, Bitcoin ETFs experienced a net inflow of 4,698 BTC, which is equivalent to $283.87 million.
IShares alone saw inflows of 2,641 BTC, valued at $159.57 million, and currently holds 347,608 BTC, worth approximately $21 billion.