Morgan Stanley Bitcoin ETF Complaints
In August, Morgan Stanley allowed its financial advisors to solicit certain clients to invest in exchange-traded Bitcoin funds. According to an August 2024 report by CNBC, the funds in question are the iShares Bitcoin Trust managed by BlackRock, as well as the Wise Origin Bitcoin Fund managed by Fidelity. If you incurred more than $100,000 in losses in either ETF, please contact MDF law for a free and confidential consultation.
Why Is Morgan Stanley Offering Bitcoin ETFs?
As CNBC reported, Morgan Stanley’s decision to offer Bitcoin ETFs followed “demand from clients.” It also reflects the firm’s efforts “to follow an evolving marketplace for digital assets.” At the same time, however, the eligibility requirements for investors reflects “a note of caution” around the offering. “Only clients with a net worth of at least $1.5 million, an aggressive risk tolerance and the desire to make speculative investments are suitable for bitcoin ETF solicitation,” according to CNBC.
Furthermore, investors can only make these investments through their taxable brokerage accounts, not their retirement accounts. Morgan Stanley “will monitor clients’ crypto holdings” in order to ensure investors are not excessively exposed, the publication’s sources claimed.
CNBC’s report also notes that banks like Morgan Stanley have recently exhibited caution around Bitcoin. The cryptocurrency “has weathered market sell-offs” as well as the downfall of FTX, the exchange accused of massive fraud. It has also been criticized by the likes of Jamie Dimon and Warren Buffett, CNBC adds.
FBI Estimates $5.6 Billion in Crypto Fraud Losses
In 2023, the Federal Bureau of Investigation released a report documenting a rise in cryptocurrency-related fraud. According to the report, the FBI’s Internet Crime Complaint Center (IC3) “received more than 69,000 complaints from the public regarding financial fraud involving the use of cryptocurrency, such as bitcoin, ether, or tether.”
The FBI estimated that “losses with a nexus to cryptocurrency” rose as high as $5.6 billion. It argues further that cryptocurrency is an “attractive vehicle for criminals” for a few reasons: its decentralized nature, the speed and irreversible nature of transactions, and the freedom it allows to transfer assets globally. “Once an individual sends a payment, the recipient owns the cryptocurrency and often quickly transfers it into an account overseas for cash out purposes,” it noted.
Crypto Investment Fraud Losses Rise
The report specifically highlighted the rise of cryptocurrency investment fraud. The perpetrators of these frauds often promise outsize returns with low risk, according to the FBI. They may also harness investors’ “fear of missing out,” targeting unsophisticated investors who are “unfamiliar with the technology and the attendant risks.”
“Losses from cryptocurrency-related investment fraud schemes reported to the IC3 rose from $2.57 billion in 2022 to $3.96 billion in 2023, an increase of 53%,” the FBI explained. “While individuals in the age ranges of 30 – 39 and 40 – 49 filed the most cryptocurrency-investment fraud complaints (approximately 5,200 reports in each age group), complainants over the age of 60 reported the highest losses (over $1.24 billion).”
Investment Losses? Call MDF Law Today
MDF Law’s veteran investor advocates have recovered tens of millions in lost funds for the victims of broker fraud. If you incurred more than $100,000 in losses in Bitcoin ETFs recommended by Morgan Stanley, call our team to discuss your options. We offer free consultations across the US and accept cases on contingency, meaning we only receive a fee if clients recover losses. Call 800-767-8040 to speak with a lawyer today.