The U.S. Securities and Exchange Commission (SEC) may investigate Elon Musk over Tesla’s $ 1.5 billion bitcoin purchase, some legal experts have warned, including a former SEC enforcement official. Given the timing of Tesla’s bitcoin purchase and Musk’s multiple tweets on the subject, some say the SEC will investigate the matter.
Elon Musk could face SEC probe
Regulators can investigate Tesla CEO Elon Musk over his bitcoin purchase, the Telegraph reported Tuesday. Last week, an SEC filing revealed that Tesla bought a significant amount of bitcoin in January. “We have invested a total of $ 1.50 billion in bitcoin … we expect to soon accept bitcoin as a form of payment for our products,” the documentation reads.
Doug Davison, a partner at Linklaters and a former branch chief of the SEC’s enforcement department, explained:
It would not be surprising – given the focus on the CEO’s tweets, bitcoin pricing and recent dramatic market movements – that the SEC is asking questions about the facts and circumstances here.
The CEO of Tesla and Spacex tweeted about bitcoin and also dogecoin. On January 29, he changed his Twitter profile to just say ‘#bitcoin’ and then tweeted: ‘In retrospect, it was inevitable.’ A few days later, he publicly endorsed bitcoin, saying that the cryptocurrency is “a good thing” and that “bitcoin is really on the verge of gaining broad acceptance through conventional finance.” His Twitter profile no longer says #bitcoin.
Vitor Constâncio, who served as Vice President of the European Central Bank (ECB) until May 2018, explained in a tweet: “It was not announced when Tesla made this investment. In December, Musk said Tesla could buy bitcoin, and since then, many statements have followed that he supports bitcoin. He added:
Bitcoin persisted and appreciated the Tesla investment. The SEC will investigate this.
Some believe the SEC will find nothing of concern by investigating Musk. Among them is Thomas Gorman, a partner at international law firm Dorsey Whitney and a former senior lawyer at the SEC. He expects SEC staff investigating Musk’s comments on social media to find that it only reflects his personal beliefs.
However, a number of people believe that Musk manipulated the BTC price to buy cheap coins. Among those who believe the SEC has cause for concern is Professor Nouriel Roubini, or ‘Dr. Doom, ”who was a long-term bitcoin skeptic. He calls Musk’s actions a form of market manipulation and urges the SEC to investigate the Tesla CEO.
Musk has gotten into trouble with the SEC before. In 2018, the security regulator charged the Tesla CEO with security fraud related to a tweet about his electric car business. Musk and Tesla agreed to settle with the regulator and paid a $ 40 million fine. However, the SEC sued Musk less than six months later over another tweet that, according to the agency, violated the previous settlement agreement.
Do you think the SEC will investigate Elon Musk over Tesla’s bitcoin purchase? Let us know in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for information only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for any damage or loss caused or claimed to have been caused by or in connection with the use or reliance on any content, goods or services mentioned in this article.