Tesla’s recent announcement about investment in Bitcoin could be a cause of concern for its Chief Executive Officer, warned Legal Experts.
Tesla’s announcement in the Securities and Exchange Commission (SEC) Form regarding $1.5 billion Bitcoin purchase could result in an investigation against CEO Elon Musk.
Recently Tesla in its SEC filing revealed huge investment in Bitcoin and that it would start accepting the cryptocurrency for its products. This came right after a series of tweets on the subject by Musk. He even went on to add Bitcoin to his bio on Twitter, but later changed it.
A former branch chief of the enforcement division of SEC and now a partner at Linklaters, Doug Davison, also commented on this. He said that given Tesla CEO’s attention on crypto tweets, Bitcoin pricing and market moves, SEC’s inquiry won’t come as a surprise.
In recent times, Musk has been tweeting a lot with respect to Bitcoin and the joke crypto, Dogecoin.
Last month he had his Twitter profile changed to #bitcoin. Following this, after a few days, he openly endorsed Bitcoin. He publicly expressed that cryptocurrency was a good thing. He also added that the Bitcoin was very likely to get broad acceptance by the mainstream finance people. However, his profile on Twitter no longer says #bitcoin.
VitorConstâncio, who served as vice president of the European Central Bank for 8 years, tweeted about Tesla’s investment. He observed in a tweet that the investment by Tesla wasn’t disclosed but in December Musk had stated that Tesla could purchase Bitcoin. This was followed by a number of statements by Musk, showing his support for Bitcoin.
According to some, nothing concrete would be found by carrying out an investigation against Musk. Among these was Thomas Gorman, who is a partner at Dorsey Whitney, formerly having held the position of a senior counsel at the SEC. According to him a probe by SEC into the social media comments of the Tesla CEO will only reflect his personal views.
On the contrary, there are some who believe that Musk manipulated the price of Bitcoin in order to buy it cheap. One such critic is Nouriel Roubini, NYU Stern School professor who is of the opinion that the SEC has a cause of concern. He has long been doubtful about the Bitcoin. According to him, Musk’s actions are a type of market manipulation, thus giving SEC good cause to investigate.
One would recall that in 2018 too Musk got into trouble with the SEC regarding a tweet about his electric car company. The securities regulator charged him with securities fraud. However, Musk and Tesla reached a settlement and a fine of $40 was paid. Six months later, SEC again charged Musk but over a different tweet that they claimed violated the previous settlement agreement.