Gary Gensler Warns Crypto Investors Ahead Of Bitcoin's ETF Decision, This Is What SEC Chairman Says!

JAKARTA - Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, issued a stern warning regarding investment in crypto assets, such as bitcoin, on Monday, January 9, 2024. This warning comes amid market expectations for approval of bitcoin spot exchange funds (ETF) by the SEC this week.

Gensler wrote a series of posts on social media platform X that contain "considerations if you decide to invest in crypto assets". He expressed some key concerns related to crypto investments, namely:

Gensler says that many crypto investment providers or asset services do not comply with applicable laws, including federal securities laws. As a result, investors in crypto asset securities may lose key information and other important protections related to their investments.

Gensler emphasized that investment in crypto assets can be very risky and often volatile. He gave an example that a number of large platforms and crypto assets have become non-liquid and/or lose value. He also reminded that investment in crypto assets remains subject to significant risks, such as hacking, theft, and market manipulation.

Gensler warned that fraudsters continue to take advantage of the popularity of crypto assets to attract retail investors into fraud. He mentioned several types of fraud that often occur, such as offering scam coins, Ponzi schemes & pyramid schemes, as well as direct theft where project promoters take away investor money.

Gensler's warning is considered a signal that the SEC will soon make a decision on the spot's bitcoin ETF, which is an investment product that follows bitcoin prices directly. Currently, there are 10 bitcoin spot ETF registrants awaiting SEC decisions, namely Ark Invest, 21shares, Bitwise, Fidelity, Galaxy Digital, Grayscale, Kryptoin, NYDIG, Valkyrie, and WisdomTree.

The SEC's decision is expected to be announced on Wednesday, which is a deadline for a bitcoin spot ETF proposal by Cathie Wood's Ark Invest and 21shares. If approved, the ETF bitcoin spot will be the first crypto investment product to get an official permission from the SEC.

Some people on social media see Gensler's warning as a sign that the SEC will approve the spot's bitcoin ETF. "Tell me [if] you will agree to the bitcoin ETF without saying it," commented Eric Weiss, a crypto observer.

On the other hand, Gensler has also long been criticized for taking a tough law enforcement approach to the crypto industry. Several US legislators suggested that Gensler be removed from the chairman of the securities watchdog. Last weekend, the SEC issued a warning about the fear of being left behind (FOMO) that could plunge crypto investors into losses.