SEC warns about high-leverage ETFs

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The SEC has sent warning letters to 9 ETF issuers, including ProShares, requesting a halt in the review of leveraged ETF filings above 200%, including those related to crypto, due to concerns about investor risk.

The agency stated that leveraged ETFs use debt to amplify returns but can also lead to greater losses, as more leveraged crypto ETFs continue to launch in the US.

Notably, Defiance recently filed for 49 3x leveraged ETFs related to tech stocks, crypto, and funds tracking the prices of BTC, ETH, and SOL.

This warning comes as the crypto ETF market is booming, with BlackRock IBIT now managing around $70 billion, helping bring the total assets of the 11 BTC funds to $122 billion.

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