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Lawyers Warn Tesla Billionaire Elon Musk Over Bitcoin Boosting Tweets

Billy Bambrough in News •Feb 11, 2021

Elon Musk, the billionaire chief executive of electric car-maker Tesla TSLA , shook Wall Street this week when he revealed his company had bought $1.5 billion of bitcoin.

The bitcoin price has surged in recent weeks, partly due to Musk's pro-bitcoin tweets—at one point sending the price of bitcoin almost 20% higher.

Now, lawyers have warned Musk, whose fast-and-loose Twitter persona has landed him in hot water with regulators before, could face questions from the U.S. Security and Exchange Commission (SEC) over "the facts and circumstances" of Tesla's bitcoin-buy.

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On Monday, Tesla announced that it bought $1.5 billion worth of bitcoin at some point this year, according to a filing with the SEC, adding it would soon start accepting payments in bitcoin.

"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," Doug Davison, a partner at Linklaters and a former branch chief of the SEC's division of enforcement, told The Telegraph newspaper, which reported the focus would likely be on exactly when Tesla bought bitcoin.

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Others echoed the warning, with Vitor Constâncio, who served as vice president of the European Central Bank until May 2018, saying via Twitter that the SEC is likely to be looking into Tesla's bitcoin purchase.

"It was not disclosed when Tesla had made this investment," Constâncio said, pointing to questions Musk asked via Twitter in December about making large bitcoin transactions.

"This was followed by many statements that he supported bitcoin. Bitcoin kept going up and the Tesla investment has appreciated."

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Earlier this month, Musk said he thinks bitcoin is on "the verge" of breaking into traditional finance.

"I am a supporter of bitcoin. I am late to the party but a supporter. I think bitcoin is on the verge of getting broad acceptance by conventional finance people," Musk said during an interview carried out on the invite-only chat app Clubhouse.

Meanwhile, Musk helped "joke" cryptocurrency dogecoin hit an all-time high by tweeting memes and running Twitter polls about the token.

In 2018, the SEC sued Musk after he tweeted he had "funding secured" to take Tesla private at $420 a share. The agency said the tweet, which sent Tesla's share price up almost 15%, violated securities laws.

Musk later reached a deal with the SEC to settle the dispute, agreeing to submit public statements about the company’s finances to vetting by its legal counsel.

Source of post: https://www.forbes.com/sites/billybambrough/2021/02/10/tesla-billionaire-elon-musk-issued-serious-bitcoin-warning-over-price-boosting-tweets/?sh=569f492fbbac
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