Crypto Flash Crash Fallout: SEC Says Leverage Is “Out of Control”

[bonk]

In October, crypto markets suffered a historic flash crash, triggering over $20 billion in liquidations—the most severe in a single day.
Now, SEC officials are making their stance clear by blocking 3–5x crypto leveraged ETFs.
Market analysts echo the regulator's alarm. The Kobeissi Letter put it bluntly: “Leverage is clearly out of control.”
Leverage magnifies gains, yes—but in choppy markets, it’s also a wrecking ball. The SEC doesn’t want ETFs amplifying that risk for retail investors.

[Nahid Hossen]

Flash crashes expose how dangerous excessive leverage can be.

[Abdul Khan]

Regulators calling it “out of control” sends a strong message.