Elon Musk’s rampant Twitter activity could get him into hot water with the SEC according to lawyers.
Legal advisors have warned that Tesla chief executive Elon Musk could come under scrutiny from the U.S. Security and Exchange Commission over his social media activity and public statements around Bitcoin.
On Monday, Feb. 8 Tesla announced in an SEC filing that it had purchased $1.5 billion worth of Bitcoin and will soon start accepting BTC payments. Shortly afterwards, prices of the asset skyrocketed to a new all-time high of a little over $48,000.
Partner at Linklaters and former branch chief of the SEC’s division of enforcement, Doug Davison, told the UK’s Telegraph newspaper:
“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,”
Former vice president of the European Central Bank, Vitor Constâncio, echoed the sentiment concluding that the “SEC will look into this,”
It was not disclosed when Tesla had made this investment. In December, Musk said that Tesla could buy bitcoin, and this was followed by many statements that he supported bitcoin. Bitcoin kept going up & Tesla investment has appreciated. The SEC will look into this 5/
— Vitor Constâncio (@VMRConstancio) February 8, 2021
The SEC and the Commodity Futures Trading Commission have the ability to investigate should they suspect market manipulation.
Musk has been vocal on Twitter about Bitcoin and DOGE on a number of occasions which contributed to Bitcoin activity on the social media platform spiking to its highest levels.
Bitcoin surged 20% in late January after Musk added #Bitcoin to his Twitter bio and tweeted “In retrospect it was inevitable” and in late December he posted an explicit meme suggesting he was strongly tempted to buy Bitcoin.
There is little doubt that Tesla’s public foray into Bitcoin has contributed to this latest price spike, with Musk’s influential tweets about crypto to his 46.5 million followers also able to move markets.
He is still currently shilling Dogecoin with this recent tweet late on Feb. 10 stating he is buying the asset. DOGE spiked 13% following that particular tweet a few hours ago.
Bought some Dogecoin for lil X, so he can be a toddler hodler
— Elon Musk (@elonmusk) February 10, 2021
Musk is no stranger to Twitter controversy; he has been previously accused of posting misinformation on the platform regarding Covid-19 and the closure of one of his factories.
In another incident he suggested that Tesla stock price was too high, resulting in a subsequent price slide. The SEC sued Musk for fraud, charging the Tesla chief with making “false and misleading tweets,” but he settled with the regulator soon after.