Elon Musk is once again under the watchful eye of the SEC after his company Tesla invested $1.5 billion in Bitcoin, according to Doug Davidson, a former Branch Chief of the Securities and Exchange Commission’s Divison of Enforcement. After Musk’s tweets regarding the cryptocurrency resulting in the rise in value, the timings of these tweets could be brought into question.
Alongside Tesla’s investment in Bitcoin, the company also revealed that it would take the currency in exchange for products to a limited extent. The 10-k filing shows that Tesla made the Bitcoin investment during January, alongside the statement that the company is likely to hold digital assets “from time to time”, and long term. With Musk now supporting Bitcoin heavily on Twitter, his behaviour is being questionned.
“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,” Davidson said to the Telegraph.
Vitor Constâncio, former Vice President of the European Central Bank, also calls the timing of this behaviour significant, with him stating that it’s understandable that the SEC would be looking into this, especially as Tesla didn’t disclose when this happened at the time.
“It was not disclosed when Tesla had made this investment,” Constâncio told Forbes. “This was followed by many statements that he supported bitcoin. Bitcoin kept going up, and the Tesla investment has appreciated.”
Musk has a strong history of influencing markets, with Dogecoin also rising in value sharply after the CEO tweeted about it.
Only two years ago, Musk paid $40 million in penalties and voluntarily stepped down as chairman after the SEC settled fraud charges against him. This began when Musk tweeted that he’d be taking Tesla private at $420, adding, “funding secured”.
An official investigation is yet to be confirmed.