[Former SEC official: Morgan Stanley’s Bitcoin strategy is a “death wish”]
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark has harshly criticized Morgan Stanley’s decision to allow his brokers access to a Bitcoin ETF, calling it a “death wish.” Stark believes the move could trigger regulatory investigations into Morgan Stanley brokers by the SEC and the Financial Industry Regulatory Authority (FINRA). He noted that these regulators will likely comprehensively review all of the bank’s records and communications related to Bitcoin sales.
Since the launch of a spot Bitcoin ETF product in January, demand has surged on Wall Street, forcing traditional banks to adjust their stance despite a historically uneasy relationship with cryptocurrencies. Stark did not accuse the Morgan Stanley broker of questionable behavior, but he warned that this embrace of Bitcoin could trigger an investigation.
Other banks such as Wells Fargo are also promoting Bitcoin in an attempt to gain an edge in the competition for revenue. Financial institutions continue to face challenges when it comes to cryptocurrency regulation as Custodia Bank tussles with the Federal Reserve. Future economic and political changes, especially if Trump is re-elected, may affect Bitcoin regulatory policy.
