Morgan Stanley, the largest asset manager in the United States, could face a tough compliance scrutiny for allowing its entire team of financial advisors to pitch a Bitcoin exchange-traded fund (ETF), former Securities and Exchange Commission (SEC) official and cryptocurrency skeptic John Reed Stark has warned.
“Morgan Stanley has subjecting itself to the largest examination in history by the SEC and FINRA by throwing 15,000 brokers at a Bitcoin pitch,” Stark wrote in an Aug. 9 email. statement.
“Identifying violations is like fishing for fish in a barrel, so whoever Morgan Stanley’s current compliance director is, well, good luck to them,” Stark added.
Regulators will have broader access to documents
Stark explained that compliance and enforcement officers from the SEC and the Financial Industry Regulatory Authority (FINRA) have instant access to all records, documents, emails, texts, voicemails and phone conversations related to Morgan Stanley’s bitcoin sales to retail investors.
“This glorious, abundant and easily accessible treasure trove of evidence is not only available to the SEC and FINRA with the click of a mouse in the form of requests for documents and testimony, but also when requested during unannounced, on-site ‘good cause’ inspections.”
Stark called the move a “death wish for Morgan Stanley.”
The criticism comes after a person familiar with the matter told Cointelegraph on Aug. 7 that Morgan Stanley had authorized 15,000 financial advisors to begin recommending Bitcoin (BTC) exchange-traded funds (ETFs) to their high-net-worth clients.
Morgan Stanley recommends only two Bitcoin ETF products
The person, who was not authorized to publicly discuss the matter, confirmed an earlier CNBC report that Morgan Stanley plans to start recommending a bitcoin ETF.
Currently, the firm only recommends two products: BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC), which crypto industry commentators believe could have important implications for Bitcoin.
Related:CBOE resubmits Bitcoin ETF options, ‘definitely seeing movement’
“We expect to see bigger inflows in the second half of the year,” said Haseeb Qureshi, managing partner at crypto venture fund Dragonfly. Written About X.
“Can you imagine how big this is?” DeFi investor Added.
According to The Far Side, the Bitcoin ETF has seen inflows of $17.3 billion since it was approved on Jan. 11. data.
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