Crypto skeptic John Reed Stark, a former US Securities and Exchange Commission official, has lambasted American banking giant Morgan Stanley’s decision to allow its advisers to offer spot Bitcoin ETFs to wealthy clients.
While many crypto watchers consider Morgan Stanley’s push a giant step for Bitcoin adoption, John Reed Stark deems it a “death wish.”
Morgan Stanley’s Bitcoin ETF Pitch Is A Bad Idea
In a recent post on Twitter (aka X), John Reed stated that Morgan Stanley’s 15,000+ financial advisers are now exposed to potential regulatory surveillance. According to the ex-SEC official, these advisers will likely be subject to “the largest SEC and FINRA examination sweep in history.”
“Identifying violations will be like shooting fish in a barrel. So whoever Morgan Stanley’s current compliance director is — well, good luck with that,” Stark continued.
He further explained that compliance staff and enforcement teams from both the SEC and the Financial Industry Regulatory Authority (FINRA) will have access to all records, documents, emails, texts, voicemails, and phone conversations concerning Morgan Stanley’s Bitcoin sales to retail investors:
“This resplendent, abundant, and easily accessible treasure trove of evidence will be available to the SEC and FINRA not only with the click of a mouse in the form of a request for documents or testimony, but also upon demand during an on-site surprise ‘for-cause’ inspection.”
Stark dubbed Morgan Stanley’s move a “death wish.”
Morgan Stanley Opened Access To Only Two Bitcoin ETF Offerings
Morgan Stanley, which holds $1.5 trillion in assets under management (AUM), is only supporting two BTC ETFs: BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund.
Data tracked by Farside Investors shows that spot Bitcoin ETFs have drawn in roughly $17.3 billion in new investor money since being approved by the U.S. Securities and Exchange Commission on Jan. 10.
Industry pundits believe Morgan Stanley opening its doors to BTC ETFs is a boon for the benchmark cryptocurrency.
“This is huge. Expect to see some chunkier inflows in the second half of the year,” Crypto venture fund Dragonfly managing partner Haseeb Qureshi posited in an X post.
Moreover, other Wall Street titans, including JPMorgan and Wells Fargo, are expected to follow in Morgan Stanley’s footsteps and offer select investors exposure to some Bitcoin ETFs.
