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Morgan Stanley Bitcoin Move Is A ‘Death Wish’: Ex-SEC Official

Ex-SEC Official John Reed Stark has labeled the Bitcoin move from Morgan Stanley as a "Death Wish" per regulatory exposure of its brokers
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Morgan Stanley Bitcoin Move Is A ‘Death Wish’: Ex-SEC Official

Highlights

  • Morgan Stanley's Bitcoin move is a mistake, Ex-SEC official hints
  • The former regulator sees regulatory probe on 15,000 brokers linked to Morgan Stanley
  • The Morgan Stanley move comes amid growing adoption in the US

Ex-SEC official John Reed Stark has slammed American banking giant Morgan Stanley’s decision to grant its brokers access to Bitcoin ETF. While many proponents in the digital currency ecosystem consider the bank’s move a positive one, John Reed Stark sees it as a “death wish.”

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Why Morgan Stanley Bitcoin Move is a Bad Idea

In his recent post on X, the ex-SEC official believes the bank’s 15,000 registered brokers are now exposed to potential regulatory surveillance. John Reed expressed optimism about the likelihood of both the SEC and FINRA going after the bank’s affiliated broker based on his experience.

Per his projections, he believes the Morgan Stanley Bitcoin move is a voluntary invitation for probe. With the SEC known for its regulatory crackdown style, the ex-SEC official is convinced the regulators will take no chances.

“SEC and FINRA compliance staff and SEC and FINRA enforcement staff will have instantaneous access to every single record, document, email, text, voicemail, phone conversation, etc. pertaining to Morgan Stanley’s bitcoin sales to retail investors,” he said in the post.

Since spot Bitcoin ETF products launched in January, the demand from Wall Street has gone through the roof. Many institutional investors are making demands for this product, forcing legacy banks to adjust their stance. While different banks have trialed several blockchain and crypto products over the years, the Bitcoin and Ethereum ETF bets introduced extra legitimacy to the product stark.

While John Reed did not imply the bank’s brokers are shady, he believes the BTC embrace can favor any probe that might arise.

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American Banks Are Just Getting Started

As a compliment to the Morgan Stanley Bitcoin move, other banks like Wells Fargo also wants to market the coin. This is not unusual for banks who aims to beat these emerging assets’ competition in yield.

Though there are no defined laws guiding banking operations and crypto, historically, the relationship is smeared. With the Custodia Bank and Federal Reserve Master Account brawl, financial institutions still have a long catch-up to play.

In the meantime, the incoming change in economic and political powers might help boost the regulations around Bitcoin. Should Donald Trump make it to the White House, the odds of favorable regulations are higher. This is based on his current crypto policies when compared to Vice President Kamala Harris.

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Godfrey Benjamin

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on X, Linkedin

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