**Breaking News: Former SEC Official Warns of Regulatory Risks for Morgan Stanley's Bitcoin Move**
Morgan Stanley's recent decision to allow its 15,000 brokers access to Bitcoin ETFs has drawn a stark warning from John Reed Stark, a former senior official at the U.S. Securities and Exchange Commission (SEC). Stark, who spent nearly two decades at the SEC, including 11 years as Chief of the Office of Internet Enforcement, has described the bank's move as a potential "regulatory nightmare."
Stark suggests that by embracing Bitcoin ETFs, Morgan Stanley is opening itself up to increased scrutiny from both the SEC and the Financial Industry Regulatory Authority (FINRA). He warns that these regulators could gain extensive access to a wide range of records—emails, documents, phone calls, and more—related to every Bitcoin transaction handled by the bank's brokers. According to Stark, this could lead to exhaustive investigations that might reveal compliance issues, posing significant legal and financial challenges for the banking giant.