Elon Musk impersonators have scammed
investors out of $2+ million worth of cryptocurrency in the last six
months, according to the Federal Trade Commission. While crypto scams
have been on the rise for months, the unwitting involvement of the
"dogefather" himself ties into a growing conversation about Musk's
outsized influence on cryptocurrency.
In the last few months...
Bitcoin
prices rose over 15% in February when Tesla said it was investing in
bitcoin and taking the cryptocurrency as payment...then tanked 17% this
month when Musk tweeted that Tesla was changing course. This past
weekend, they fell after he replied to a tweet implying that Tesla may
have sold its bitcoin holdings (Musk later said Tesla didn't).
Dogecoin, too, rose ahead of Musk's SNL
debut, sank 15% after he said it's "a hustle" on live TV, then soared
over 30% last Friday when he tweeted to his 55 million followers that
he's working with dogecoin's developers.
Is he breaking any rules?
Musk
famously crossed the line in 2018 when he tweeted that he had "funding
secured" to take Tesla private. He didn't, and the SEC fined both Tesla
and Musk and had him step down as chairman. Tesla lawyers now vet any tweets containing any information "material to the company."
As for his
crypto tweets, Musk is within bounds...for now. "It's clearly grossly
irresponsible, but it may not be illegal," Better Markets CEO Dennis
Kelleher told Reuters.
- To break
the law, lawyers told Reuters, Musk would need to 1) be using insider
information or 2) influencing prices for the purpose of enriching
himself or his associates.
Regardless
of whether he's profiting or trolling, Musk's ability to send the price
of an asset worth almost $1 trillion swinging by double-digit
percentages is "bizarre and incredible," Bloomberg's Matt Levine writes.
While
Tesla's initial embrace of bitcoin was a major stamp of legitimacy for
the crypto, the CEO's comments are now fueling critics' argument that
cryptocurrency is too volatile. "If one person can dramatically alter
spending power, the 'stable store of value' criteria of a currency is
not met," UBS Chief Economist Paul Donovan wrote.
While we're here...Michael Burry, the IRL version of Christian Bale's character in The Big Short, took out a $534 million bet against Tesla in Q1. He's previously expressed concerns about Tesla's profitability.
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