2025-12-04 01:22:23

The SEC recently sent letters to institutions looking to launch ultra-high leverage ETFs.

What does this mean? It means that issuers planning to launch leveraged products with more than 2x leverage, including ProShares which is already offering leveraged crypto ETFs, now have to pause and thoroughly explain the associated risks. Until they provide satisfactory answers, all approval applications are on hold.

What is the SEC concerned about? Simply put, high leverage can amplify both market volatility and investor losses. Although there are already plenty of leveraged tech and crypto-related products trading in the US stock market, regulators clearly feel that this trend needs to be reined in.

This move has effectively put the brakes on products aiming to ramp up leverage.

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4am_degen

· 21h ago

Haha, the SEC is afraid that retail investors will get burned, while big institutions playing with leverage get a free pass. ProShares has to give a proper explanation this time, or else it'll be another six-month wait. That's how leveraged products are—you make a killing when it goes well, but get liquidated when it goes bad. The regulators are actually reacting pretty late. Anyone wanting to rush in has been stopped, so the market is quieter now. Emm, we still have to wait and see how strict the SEC's response will be.

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APY_Chaser

· 12-04 01:52

Here we go again, is the SEC afraid of retail investors making money? ProShares got blocked this time, do they have to write a self-criticism? Leverage is playing with fire to begin with, and now the surfing plans are all on hold. Regulators just love to hit the brakes right at the critical moment—absolutely classic.

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PessimisticLayer

· 12-04 01:52

The SEC is really something this time. Leverage products have always been a tool to fleece retail investors, and now someone is finally stepping in. --- ProShares is probably panicking this time. Hitting the brakes doesn't feel good. --- Oh my god, another risk warning... Why are these institutions always thinking of ways to make retail investors lose money? --- They have to spend ages explaining even 2x leverage. Looks like the SEC is getting serious this time. --- The crypto industry is really afraid of regulation. With this news out, the market will probably drop again. --- Those wanting to go for leverage will have to wait. Looks like there's no chance of approval in the short term. --- The risks really need to be clearly explained, or else something bad could easily happen. --- A classic "let it loose first, then tighten it up" move. They really know how to play this game.

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LiquidityWhisperer

· 12-04 01:45

The SEC is tightening regulations again, probably afraid that retail investors might blow things up... ProShares will have to write a proper self-criticism this time.

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HappyMinerUncle

· 12-04 01:42

Back to suspending approvals again... The SEC is really scared now. There have been too many blow-up stories... Even ProShares has to keep its head down and behave. Leverage feels amazing when you're winning, but it's truly despairing when you lose... This time the regulators seem to be making the right move. 2x leverage may not sound like much, but when the market swings, it’s a direct bloodbath. If high leverage is off the table, retail investors will have to find their own offshore channels again, haha. With all this back and forth, it feels like it will only breed more gray market products.

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LuckyBlindCat

· 12-04 01:35

Ha, is the SEC afraid that retail investors will go all-in recklessly? ProShares got blocked this time, and the others shouldn't even think about getting through. Investors with a gambler's mentality have been itching to get in, but now this just got stuck in their throats. Even 2x leverage has to be suspended for review? The OGs will have to keep riding their bikes, and all the newcomers are left outside the door. The bad news came at just the right time—leverage is being reduced again, and the market is bound to change. Do you guys think this is about protecting retail investors, or is it just monopolistic behavior? Feels a bit contradictory. Honestly, who doesn't want to play with leverage, but this time the SEC really went hard. ProShares is in an awkward spot this time, their application just got stuck here.

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