power on… There is a monthly Opinion column from Mark Powers, who after a stint with the SEC spent much of his 40-year legal career working with cases related to complex securities in the United States. He is now an assistant professor at Florida International University College of Law, where he teaches a course on “Blockchain, Crypto and Regulatory Thought”.
These past few weeks have been turbulent, especially for newcomers to the cryptocurrency market. First on May 8, Tesla CEO Elon Musk host was host Shanivari Night Live Where he promoted Dogcoin (Doge) – A highly speculative, volatile cryptocurrency with current meaningful business models in addition to being a meme to tip others. Then, a few days later, Musk dissolved Bitcoin (B T c) In a tweet, stating that Tesla will no longer allow shopping Of its electric vehicles with BTC due to its perceived substantial, environmentally friendly energy use.
This is, of course, only a half-truth, as is alleged, on a relative basis, of the current traditional financial industry. Uses double the amount of energyAccording to a new study by Galaxy Digital. The crypto industry also comes close to being 40% of bitcoin mining Operated According to the latest study from the Cambridge Center for Alternative Finance, by renewable energy sources. And accordingly For Skybridge Capital founder Anthony Scaramucci, “# The future of bitcoin mining is renewable energy.”
Energy problem as agenda?
Also, leave it to The New York Times to never let the truth, or extra truth, get in the way of advancing your own political agenda, which is certainly progressive and anyone who benefits the upper-middle class Also against cheese, which includes capitalism and investment which fails to advance its liberal positions and the rich. The New York Times has published at least four articles on BTC’s energy consumption, including: Article By reporter Nathaniel Popper in January 2018, then one more By Benjamin Appelbaum in February 2018, and then one more By Andrew Ross Sorkin in March 2021. Recently, The New York Times Published Hiroko Tabuchi’s fourth article on April 14 on the alleged large amount of energy consumption and carbon emissions caused by bitcoin.
However, a number of alleged “facts” in that most recent piece and the 2018 report that supported that position were completely refuted by Nick Carter of Castle Island Ventures in a Harvard Business Review article. Published 5 May. This is more than a coincidence, I suspect, that two articles from the NYT were published in early 2018 and two in early 2021, both of the time period when the BTC price was rising. Is the Gray Lady just reporting the news, or is it advancing the agenda of alleged environmental concerns related to digital assets and the opposition of many crypto millionaires created by BTC ownership?
Then, on May 19, BTC, Ether (ETH) And most cryptocurrencies Hail of over 25%. Now, for those in space like me, who were here before 2018, they understand that such a large price fluctuation is not new to crypto. Indeed, in 2017 alone, BTC fell more than 30% several times that year. It has fallen more than 50% several times in the last 10 years. During nerve-racking, this yet-to-be-mature blockchain technology will cost so much. From an investment perspective, Basic Finance 101 decides that for big rewards, there are big risks.
Also, it is worth noting that whoever bought BTC Any time period Thanksgiving is still before 2020 – even with BTC About $ 40,000. Price of – More than 100% return. Even if the price goes down from that level to about $ 20,000 in the coming days, weeks or months, still Not an investor Anyone who has currency since then has to lose a penny.
And what’s with the ban on crypto?
Apart from Musk’s tweet about Tesla not accepting BTC anymore, there was another supposed reason to dive China’s action on crypto trading in country. Nevertheless, educated and within space for some time, they know that this was not the first such action by that country. More importantly, they know that all previous attempts have failed.
More and more people have digital assets with numbers in China and elsewhere Best 105 million worldwide by February, despite sovereign efforts to curb, regulate or ban them. This is likely because there are many countries in the world – such as China, Greece and Venezuela – and continents – such as Africa – where citizens do not fully trust their governments or institutions. Either their fiat currencies have been devalued by excessive inflation, their governments are persecuting their people and preventing them from transferring assets outside their borders, or their citizens are concerned that their governments will be losing their bank assets. Can “nationalize” – as it did in Greece in 2014 – 2016 after the last financial crisis.
About 1.7 billion. Are also The people Those in the world who – for various reasons – do not have access to bank accounts or financial institutions where they can maintain stable savings or engage in financial and commercial transactions. The peer-to-peer system allowed by the invention of bitcoin in October 2008 allowed this; Now all you need is a smartphone.
JP Morgan Chase showed its true colors as soon as the big fall began on the morning of May 19. Remember, JPMorgan chairman was Jamie Dimon, who Famously said a few years ago That BTC was a fraud. Nevertheless, JP Morgan has been Develop your own digital coin, JPM coinage. When prices fell, JP Morgan again Explosion in asset class. Also, one can almost understand Shadenfreude Some are reporting on the price drop that day in traditional media.
Back to moscow
But I backtrack … The thing I really want to focus on is Musk and his tweet. Because he does it regularly and, in my opinion, with a reckless abandonment that has not only damaged the digital asset market, but possibly caused millions of dollars to many of his Twitter followers.
Many of you will remember, or be surprised to know, that Musk was Accused Case of fraud by the United States Securities and Exchange Commission for issuing false and misleading tweets in September 2018. Specifically, the SEC alleged that they made it “false and misleading” by claiming in tweets that Tesla had obtained funds to take the company privately at $ 420 per share. Tesla was also sued for failing to exercise proper disclosure controls to ensure that Musk, then Tesla’s chairman and CEO, did not mislead Tesla shareholders and the investing public.
Tesla and Musk settled the charges the following month in short order and Agreed To pay a penalty of $ 20 million each and to appoint two independent directors and a securities advisor, to advance review all of Musk’s tweets involving Tesla to ensure that any material information, or Information that can reasonably be considered material is publicized and accurate.
Despite this being the SEC agreement Approved Musk was on it again in 2019, by the court in October 2018, Tweet – According to the SEC – without pre-review and approval by Tesla’s new securities advisory and governance committee. The SEC thus brought a motion to hold him in contempt of court for violating the consent decision signed six months earlier. Musk claimed that the newly tweeted information was not “physical” and was, in any event, protected by his First Amendment rights. That case was also settled, in particular, with the amendment of the judgment Identify There are nine types of information related to Tesla for which Musk will have to take prior permission before releasing the tweet.
In March – just two months ago – a Delaware derivative lawsuit was reopened Accused Musk violated the SEC agreement and his fiduciary duties by his “irregular tweets”. It has been more than two and a half years since Tesla and Musk collectively paid fines of $ 40 million. However, there is still no specific court-approved SOX Fair Fund Plan in SEC action to distribute money to Tesla’s shareholders, who were financially harmed by alleged tweets about Musk being private. As the saying goes, justice delayed is justice denied – in this case, it is Tesla’s shareholders who would have lost.
So, when Musk regularly tweets about Bitcoin, Dogcoin and other cryptocurrencies, one may rightly ask: Is the SEC listening to the Commodity Futures Trading Commission (for commodities like BTC) or the Federal Trade Commission? Or more technically correct, are they studying? Are his hundreds of tweets on these and other topics potentially in violation of the SEC-amended decision to which he consented? Are there any tweets related to Tesla’s finances or business that are possibly misleading or that have not gone through the pre-consent approval process? Does Musk have some undisclosed personal or business interests in knocking over BTC and promoting DOGE? Are his tweets, in which some consider wild speculation over the prices of Dogcoin and other cryptocurrency, only allowed puffery and First Amendment speech, or are they a violation of securities, commodities, consumer or other laws?
From the FTC’s point of view, one of its concerns is consumer fraud. It and the SEC have addressed the large impact of social media influencers and celebrities in public announcements. In November 2019, FTC Was released Guidelines to remind influencers that if they are receiving any kind of compensation for recommending a product, it needs to be disclosed. Is SEC Sued Many celebrity endorsers, including Floyd Mayweather and DJ Khalid Kha, To receive undisclosed compensation for promoting cryptocurrency. Is it perhaps time for the government to revisit Musk and his tweets?
This article does not include investment advice or recommendations. Every investment and business move involves risk, and readers should do their own research when making decisions.
Mark pavers Currently is an assistant professor at Florida International University College of Law, where he is teaching “blockchain, crypto, and regulatory ideas.” He recently retired from practice at the M Law 100 law firm, where he created both its national securities litigation and regulatory enforcement practice team and its hedge fund industry practice. Mark began his legal career in the Enforcement Division of the SEC. During his 40-year legislation, he was involved in representations including the Bernie Madoff Ponzi scheme, the recent presidential pardon and the Martha Stewart Insider Trading Trial.
The opinions expressed are those of the author alone and do not necessarily reflect the views of Cointegraphs nor Florida International University College of Law or its affiliates. This article is for general information purposes and should not be intended as legal advice.