Musk denies “pumping and dumping” Bitcoin – and says Tesla will resume transactions once that mining target is met

Top line

While the cryptocurrency market’s week-long defeat persists, Tesla’s billionaire CEO Elon Musk went on Twitter Sunday afternoon to refute claims that he was involved in a Bitcoin pump-and-dump program earlier this year, saying the electric vehicle company said would re-invest the world’s largest cryptocurrency once its mining activities represent a “reasonable” amount of clean energy use.

Elon Musk in March 2020.

AFP via Getty Images

Important facts

“That’s not true,” Musk said in response to a Cointelegraph article that highlighted comments that Magda Wierzycka, CEO of financial services company Sygnia, criticized Musk for “manipulating the price” of Bitcoin.

According to Wierzycka, an anti-corruption activist who made the comments on a podcast posted on Wednesday, Musk announced Tesla’s Bitcoin investment on Twitter, then “pumped up the price of Bitcoin” by tweeting it on social media and then “on the Peak was sold. “

“Tesla only sold ~ 10% of its inventory to confirm this [bitcoin] could be liquidated without moving [the] Market, “added Musk, referring to Tesla’s Bitcoin sale in the first quarter, which resulted in proceeds of $ 272 million after several tweets promoting the cryptocurrency.

On another major bitcoin pivot, Musk also said the company would “re-allow bitcoin transactions” once it was confirmed that miners were using approximately 50% clean energy with a “positive future trend”.

Sunday’s statement comes after Musk and his billionaire Michael Saylor, who heads business analytics firm MicroStrategy, announced on Twitter late last month that they had met with some of the largest bitcoin miners in the country and would lead efforts “To promote the transparency of energy consumption and accelerate sustainability”. Initiatives worldwide. “

Specific goals for the group are yet to be announced, and the participants collectively control less than 10% of the global computing power of the Bitcoin network, but the effort was almost immediately criticized by the industry for trying to centralize cryptocurrency, which on purpose Finance was designed for decentralization.

Crucial quote

“The volatility that we’ve seen [in bitcoin] is an unexpected function of what I would call Elon Musk’s market manipulation and if that happened to a publicly traded company it would be investigated and severely sanctioned by the SEC, “Wierzycka said on Wednesday, probably referring to the fact that the SEC only has regulatory authority over securities – not currencies. The SEC defines market manipulation as “willful or willful conduct aimed at deceiving or defrauding investors by controlling or artificially influencing the price of securities”.

Key background

Bitcoin skyrocketed in February after Tesla announced it would invest $ 1.5 billion in the world’s largest cryptocurrency, but prices have fallen since April when Tesla announced it was taking part of its stake in the framework has sold an official registration. Musk, who cheered the crypto market during its massive rally earlier this year, helped compound the crash last month by tweeting that Tesla would no longer accept Bitcoin because of its high environmental costs – a single development that exceeded 300 Billions of dollars in crypto market value destroyed in just a few hours. Markets have not rallied since then due to tightening regulatory action in China, and the value of the world’s cryptocurrencies is around $ 1.6 trillion on Sunday, just 60% of what it was a month ago. Bitcoin prices rose nearly $ 1,500 after Musk’s tweet, climbing to just under $ 37,550.

What to look out for

The efforts of Saylor and Musk, known as the Bitcoin Mining Council, would theoretically require participants to publicize their renewable energy use, Musk said last month, but a schedule has not yet been announced.

tangent

Despite Bitcoin’s sharp crash since last month, two of the cryptocurrency’s biggest corporate backers doubled their Bitcoin investments last week. MicroStrategy, which owns more Bitcoin than any other company, announced last week it would take out $ 500 million in debt to buy more Bitcoin. Bitcoin holdings are depreciating.

further reading

Sygnia CEO criticizes Elon Musk for alleged Bitcoin pump and dump (Cointelegraph)

Bitcoin’s Biggest Corporate Backer Expects $ 285M Loss After Crypto Crash – But Wants To Raise $ 400M In Debt To Buy More (Forbes)

Elon Musk and Michael Saylor lead bitcoin miners’ efforts to address environmental concerns (Forbes)