Eccentric billionaire and tech mogul Elon Musk could come under probe from the U.S Securities and Exchange Commission (SEC) following the crypto market’s growth and involvement.
Musk Propping The Market For Tesla?
According to legal experts, Musk’s social media activities could be investigated. The angle here is the likelihood that the Tesla boss could have influenced the Bitcoin market days before announcing Tesla’s $1.5 billion play.
Tesla’s filing with the SEC saw Bitcoin reach a new all-time high of $48,000.
Prior to Tesla’s announcement, Musk had been quite vocal in his support for digital assets. He even changed his Twitter profile bio to #Bitcoin on Jan. 29. This propelled the digital currency upwards as much as 20% after failing to break above $30k for a full week.
As though that was not enough, he also picked on meme-based cryptocurrency Dogecoin. The comical online currency climbed as much as 130% following Musk’s involvement online.
Some believe the SEC might be knocking on Musk’s front door following the largest Bitcoin purchase from a publicly listed company.
The SEC has not entirely accepted crypto assets and has been especially critical of BTC due to its hard-to-track capability. Tesla using it as an exchange medium could pique the regulator’s interest.
A partner at Linklaters and former branch chief of the SEC’s division of enforcement, Doug Davison commented on the possibility of this happening:
“It would not be surprising – given the focus on the chief executive’s tweets, Bitcoin pricing and recent dramatic market moves – for the SEC to ask questions about the facts and circumstances here,” he said.
A former top official at the European Central Bank, Vitor Constancio, also mentioned this possibility saying the SEC may be driven to investigate Musk’s tweets and Tesla’s investments. Looking at the media influence he commands (46.5 million followers on Twitter alone), his motives may be called into questioning.
Tesla has a good product but the question is if it will sell enough cars to get such profits in face of coming fierce competition. However, this is not the question I want to comment upon. It is also not about what may interest the SEC and market conduct…4/
— Vitor Constâncio (@VMRConstancio) February 8, 2021
Others are not so certain that the SEC will look into the situation. Dorsey Whitney’s legal partner and former senior counsel for the SEC, Thomas Gorman, believes the SEC may only view his tweets as a reflection of his belief in the crypto asset.
Musk Is Not A First Time Offender
It is unclear if his tweets are directly aiding the spike in the crypto space, but Bitcoin has risen as much as 300% since Tesla joined the party, and the SEC may want to know for how long Tesla has had a Bitcoin portfolio.
Musk has had some brushes with the financial regulator before. He drew the SEC’s ire when he tweeted that the Tesla stock price was priced too high way back in 2018.
The price fell afterward, with the SEC charging him for fraud. Car company Tesla was also slammed for not putting a lid on his claims. He settled with the agency outside of court.