Tesla CEO Elon Musk is reportedly under SEC scrutiny again, and this time, it’s over some alleged cryptocurrency manipulation, especially Dogecoin.
Tesla, Elon Musk, and the SEC
Musk and the SEC have had a few run-ins with each other, and it was rarely with a good outcome.
Most famously, the SEC filed a lawsuit against Musk over his infamous “funding secured” comment regarding his failed attempt to take Tesla private back in 2018.
The Security and Exchange Commission (SEC) judged that Musk exaggerated when saying that the funding was “secured”:
Musk went on a campaign against the SEC, calling them names and claiming that they were working for people shorting the electric automaker.
Tesla and Musk ended up reaching a settlement with the SEC.
As part of the settlement, Musk agreed to step down from the role of Chairman of the board, and both Tesla and Musk had to each pay $20 million fines.
The CEO presumably didn’t want Tesla to have to pay for his issue with the SEC, and while he couldn’t directly pay for Tesla’s part of the fine, he decided to buy $20 million worth of shares from Tesla.
That way, he sort of indirectly ended up paying for Tesla’s fine – though he also ended up with ~71,000 additional Tesla shares in the process.
As we previously reported, Musk ended up actually making money from the settlement due to Tesla’s stock price surging last year.
SEC now goes after Musk for Dogecoin
Lately, Musk has been talking a lot about cryptocurrency. Previously, the technology didn’t seem to interest him much, but he now believes that it is at least “a little better” than fiat money.
His interest in cryptocurrency culminated into Tesla buying $1.5 billion worth of bitcoins last month.
While Tesla invested into bitcoins, Musk says that he is a big fan of Dogecoin, which actually started as a joke.
The above image depicts Dogecoin’s logo on the moon, which is a reference to a meme often used in the Dogecoin community about the coin going “to the moon” as in increasing in value greatly.
Musk has been tweeting about Dogecoin a lot this week, and while his tweets might sound like jokes, they have been very influential and helped increase the value of the coin by over 500% in the last month:
It started as a meme, but the cryptocurrency has now a market capitalization worth over $6 billion.
When asked about why he likes Dogecoin, Musk simply answered that he “loves dogs and memes.”
Tesla’s CEO also said that he set up Dogecoin mining rigs with his kids last weekend.
Now, financial newswire First Squawk reports that the SEC is getting involved and looking into Musk for potential security violations regarding Dogecoin:
Presumably, they would be looking at him using his influential Twitter account to manipulate the price of the Dogecoin – similar to what happened with Tesla back in 2018.
Electrek’s Take
That’s pretty crazy.
If this is accurate, the US government is looking into Elon for tweeting about a meme cryptocurrrency.
That’s 2021 now.
To be fair, I understand how it looks at the surface for SEC. Dogecoin had a fairly small market cap, and Elon’s influence can easily move it, and it looks like it did.
But did Elon or potential co-conspirators really had a significant Dogecoin position and greatly benefited from those tweets?
Somehow I doubt that one of the richest men on earth decided that it would be a good way to make more money.
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