SEC Chair Gensler Issues Second Warning Ahead of Impending Spot Bitcoin ETF Verdict

The Securities and Exchange Commission (SEC) chairman, Gary Gensler, is stirring feathers in the crypto space with his latest online post.

In a tweet on X (formerly Twitter) posted on Tuesday, Gensler advised investors engaging with crypto assets to exercise caution and employ proper risk management practices.

He emphasized that despite the marketing of digital assets as “new opportunities,” there are substantial risks associated with buying and selling them.

If you're considering an investment involving crypto assets, be cautious.

Crypto asset securities may be marketed as new opportunities but there are serious risks involved.

Read @SEC_Investor_Ed's Director Take:

— Gary Gensler (@GaryGensler) January 9, 2024

This tweet marks the second instance where the former MIT blockchain professor has taken the time to highlight the risks inherent in the crypto asset ecosystem.

In a previous tweet on X posted on Monday, Gensler pointed out the inherent volatility surrounding digital assets. He noted that several crypto platforms have become insolvent in recent years, leading to significant losses for investors.

2⃣ 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.

— Gary Gensler (@GaryGensler) January 8, 2024

The same risk-averse ideology runs among most government officials concerning cryptocurrencies, as epitomized by an investor education program link shared by Gensler in the early hours of today.

Titled “Should You Buy The New Cryptocurrency or Token?” the article is part of the SEC’s initiative to provide accessible information on digital assets to US investors, outlining the inherent risks involved in trading them.

The article authored by Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy, tries to educate investors on the inherent risks rampant in digital asset trading, like lack of regulation and zero investor protection.

Schock also alluded to the fact that more US investors are paying close attention to the nascent industry following a survey carried out in that regard.

BlackRock Files New Amended Spot Bitcoin ETF Application

While Gensler and the SEC have maintained silence on the growing expectation of a spot Bitcoin exchange-traded fund (ETF) entering the US market, recent developments indicate a potentially eventful month ahead.

A spot Bitcoin ETF allows mainstream investors to trade securitized representations of the foremost crypto assets. This investment vehicle offers exposure to the Bitcoin asset while eliminating the need to hold the cryptocurrency directly.

Asset management firms like BlackRock, Fidelity, Bitwise, VanEck, and several other legacy financial institutions are some of the spot Bitcoin ETF hopefuls seeking the securities agency’s approval to launch their crypto-backed products.

The $11 trillion BlackRock asset management firm has been active in the past week. The Larry Fink-led firm recently re-filed an amended version of its S-1 application for a spot Bitcoin ETF service to the SEC.

Sharing the news on his X account, Bloomberg’s foremost ETF analyst, Eric Balchunas, stated that the amendments are meant to address last-minute comments given by the SEC the previous day.

BlackRock just re-filed their S-1 based on last min comments given yesterday. Hard to tell what has changed at first glance, but imp thing is that the unheard of 24hr turnaround time bt filing, comments and re-filing tells us all parties aiming to get this show on road pronto. pic.twitter.com/61cPtGJ4Oy

— Eric Balchunas (@EricBalchunas) January 9, 2024

However, Balchunas stated that this does not indicate that approval could be secured within a day, but it clearly shows that BlackRock is keen on launching its product as soon as possible.