TechFlow news, according to Bitcoinist, John Reed Stark, former head of the internet enforcement unit at the U.S. SEC, said that Morgan Stanley's recent large-scale launch of a bitcoin ETF could expose it to heightened regulatory scrutiny.
Earlier this week, the Wall Street giant announced plans to allow its 15,000 licensed financial advisors to begin marketing spot bitcoin ETFs—such as BlackRock’s IBIT and Fidelity’s FBTC—to high-net-worth individuals with at least $1.5 million in net assets and high risk tolerance.
Stark noted that with Morgan Stanley’s broad rollout of bitcoin ETFs, regulators will gain almost immediate access to all data related to the bank’s sales of bitcoin to retail clients. This includes all forms of communication such as documents, emails, text messages, voicemails, and phone conversations. Interestingly, both the SEC and FINRA can not only request access to this "treasure trove of evidence," but also demand on-site inspections at Morgan Stanley offices.
