Power on… It is the monthly opinion column of Marc Powers. After his tenure at the SEC, he has dealt with complex securities-related cases for most of his 40-year legal career in the United States. He is now an adjunct professor at the Florida International University School of Law, where he teaches the “Blockchain, Encryption, and Regulatory Considerations” course.
The past few weeks have been turbulent, especially for newcomers to the cryptocurrency market. First of all, on May 8, Tesla CEO Elon Musk Yes host Saturday night live He promotes Dogecoin (Dog)-A highly speculative, volatile cryptocurrency with a current meaningful business model, rather than a tipping meme. Then, a few days later, Musk abandoned Bitcoin (Bitcoin) Pointed out in a tweet Tesla will no longer allow purchases An electric car that claims to carry a large amount of BTC because its use of energy is bad for the environment.
Of course, this is only half the truth. Relatively speaking, it is reported that the current traditional financial industry Consumes twice as much energy, According to a new study by Galaxy Digital.The crypto industry is also close to owning 40% of Bitcoin mining dynamic The latest research by the Cambridge Centre for Alternative Finance shows that renewable energy is provided by renewable energy.with according to For Skybridge Capital founder Anthony Scaramucci, “The future of #bitcoin mining is renewable energy.”
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Energy issues as an agenda?
Similarly, leave it to the New York Times, and never let the truth or other truths prevent it from advancing its political agenda. This agenda is absolutely progressive and is incompatible with the majority of those that benefit the middle and upper classes, involving capitalism and investment. Everything went against him and failed to improve his liberal status and the rich.The New York Times published no less than four articles on BTC energy consumption, including article In January 2018 by reporter Nathaniel Popper (Nathaniel Popper) other Written by Binyamin Appelbaum in February 2018, then other Created by Andrew Ross Sorkin in March 2021. Recently, the New York Times Published Mr. Tabuchi published his fourth article on April 14th, which is said to be a large amount of energy consumption and carbon emissions caused by Bitcoin.
However, the author of “Nixon” of “Castle” magazine “Castle” magazine in an article in “Harvard Business Review” completely refuted many of the so-called “facts” in a recent article and a partial support for this. The 2018 report of the position. Published On May 5th, I suspect that two articles in the New York Times were published in early 2018 and two were published in early 2021. This is no accident. Both periods are periods when BTC prices are rising. Is Gray Lady just reporting the news, or is it pushing the agenda, expressing environmental issues related to digital assets, and opposing the many crypto millionaires created by BTC owners?
Then, on May 19th, BTC, Ether (ETH) And most cryptocurrencies Drop by more than 25%. Now, for astronauts like me, who were here before 2018, they know that such huge price fluctuations are nothing new for cryptocurrencies. Indeed, in 2017 alone, BTC dropped by more than 30% that year. In the past ten years, it has fallen by more than 50%. Although unbelievable, this is the price people must pay for this immature blockchain technology. From an investment point of view, “Basic Finance” 101 pointed out that getting rich returns will bring huge risks.
In addition, it’s worth noting that anyone who buys BTC from BTC Any time period Even with the use of BTC, it still exists today before Thanksgiving in 2020 Approximately $40,000 price -The rate of return exceeds 100%. Even in the next few days, weeks or months, the price will be reduced by about half from this level to $20,000, Not an investor Those who have held the currency from then to today will lose a penny.
What is the ban on cryptocurrency?
In addition to Musk’s tweet about Tesla no longer accepting Bitcoin (BTC), another speculative reason for the dive is China cracks down on cryptocurrency trading domestic. However, for those who have been educated and spent some time in space, they know that this is not the first such repression in the country. More importantly, they know that all previous efforts have failed.
More and more people in China and other regions own digital assets, Beyond As of February, despite the efforts of sovereign states to contain, control or ban them, there are 105 million people in the world. This may be because there are many countries in the world (such as China, Greece and Venezuela) and the citizens of all continents (such as Africa) do not fully trust their governments or institutions. Its fiat currency has devalued due to inflation, its government is oppressing its people and prohibiting them from transferring assets abroad, or its citizens are worried that its government may “nationalize” its bank assets (as it did in Greece in 2014) 2016 after the last financial crisis.
About 1.7 billion people In the world, due to various reasons, they cannot access bank accounts or financial institutions, and thus cannot maintain stable savings or engage in financial and commercial transactions. The peer-to-peer system allowed by the Bitcoin invention in October 2008 allowed this; all you need now is a smartphone.
In the early morning of May 19, after the sharp decline began, JPMorgan Chase showed its true colors. Remember, it’s Jamie Dimon, chairman of JPMorgan Chase Famous a few years ago BTC is fraud.However, JPMorgan Chase Develop your own digital coin, JPM Coin.When prices fell, JPMorgan Chase again Blasting asset class.Moreover, you can almost feel gloat Some traditional media reported that prices fell on that day.
Back to Musk
But I digress… what I really want to pay attention to is Musk and his tweets. Because he often does this, and in my opinion, it is Lure’s giving up, which not only hurts the digital asset market, but may also cause many of his Twitter followers to lose millions of dollars.
Many of you may remember or be surprised to find that Musk once defendant The US Securities and Exchange Commission (SEC) issued false and misleading tweets in September 2018 for fraud. Specifically, the SEC said he “made falsehood and misleading” when he claimed on Twitter that Tesla had received funds to privatize the company for $420 per share. Tesla was also sued for failing to take appropriate disclosure controls to ensure that Musk, then Tesla’s chairman and chief executive officer, did not mislead Tesla shareholders and the investing public.
Tesla and Musk resolved the allegations next month in a short period of time. agree Impose a fine of 20 million U.S. dollars, and hire two independent directors and a securities consultant to review all of Musk’s tweets related to Tesla in advance to ensure that any important information or information that is reasonably considered important is included. Get pre-approved and accurate.
Although the U.S. Securities and Exchange Commission (SEC) reached a settlement, Officially recognized After being ruled by the court in October 2018, Musk was tried again in 2019. Tweet According to the SEC, it has not been reviewed and approved in advance by Tesla’s new securities advisory and governance committee. Therefore, the SEC filed a motion asking him to see the court because he violated the consent form he signed six months ago. Musk claimed that the new Twitter information is not “substantial” information and is protected by his First Amendment rights anyway.The case was also resolved and the judgment was amended to confirm Musk must obtain 9 kinds of information related to Tesla in advance before posting a tweet.
In March two months ago, a Derivatives lawsuit in Delaware was uncovered again defendant Musk’s “inadvertent tweets” violated the SEC’s settlement agreement and his fiduciary duties. Two and a half years have passed since Tesla and Musk paid a collective fine of $40 million.However, there is still no specific court approval SOX Fair Fund The SEC plans to take action to distribute funds to Tesla’s shareholders who were financially damaged by Musk’s so-called privatization tweets. As the proverb goes, delaying justice is rejecting justice-in this case, Tesla shareholders may fail.
Therefore, as Musk regularly posts tweets about Bitcoin, Dogecoin and other cryptocurrencies, one can rightly ask: Is the SEC, the Commodity Futures Trading Commission (for commodities such as BTC) or the Federal Trade Commission listening? Or more accurately, are they reading? Is there any one of his hundreds of tweets on these and other topics that might violate the SEC’s amended judgment he agreed to? Are there any tweets related to Tesla’s finances or business that might mislead others or fail the agreed pre-approval process? Does Musk have undisclosed personal or commercial interests in knocking on BTC and promoting DOGE? Does his tweet contain what some people would think is crazy speculation on the price of Dogecoin and other cryptocurrencies, pure flattery and permitted First Amendment remarks, or a violation of securities, commodity, consumer or other laws?
From the perspective of the Federal Trade Commission, one of its concerns is consumer fraud. Both it and the SEC mentioned the enormous influence of social media influencers and celebrities in public statements. In November 2019, the Federal Trade Commission release A guide to remind influencers that if they receive any form of compensation for recommending products, they must be disclosed.U.S. Securities and Exchange Commission Prosecute Several celebrity spokespersons, including Floyd Mayweather and DJ Khalid, Used to receive compensation for undisclosed promotion of cryptocurrency. Maybe it’s time for the government to re-examine Musk and his tweets?
This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should conduct their own research when making a decision.
Mark Bowles He is currently an adjunct professor at the Florida International University School of Law, where he teaches “Blockchain, Encryption, and Regulatory Considerations.” He recently withdrew from his practice career at the Am Law 100 law firm, where he formed a national securities litigation and regulatory enforcement practice team and a hedge fund industry practice team. Marc started his legal career in the SEC Enforcement Department. During his 40-year legal career, he was involved in representation including the Bernie Madoff Ponzi Project, the recent presidential pardon and the Martha Stewart insider trading trial.
The views expressed are only the personal opinions of the author and do not necessarily reflect the views of Cointelegraph or the Florida International University School of Law or its affiliates. This article is for general reference only and is not intended and should not be regarded as legal advice.
