Aaryamann Shrivastava
FXStreet
- The SEC investigation into Elon Musk's Tesla was requested over Twitter ties, alleging misappropriating assets and conflicts of interest.
- Senator Warren's request came hours after Wells Fargo raised their target price for TSLA to $265 from $170.
- Back in 2021, Tesla ending acceptance of Bitcoin led to a market crash, and since then, Elon Musk has had significant influence over cryptocurrencies and their price action.
Elon Musk has had a significant hold over the crypto industry for years now with his statements regarding Bitcoin to Dogecoin raging a price action storm. A key entity in this entire scenario was his electric car company, Tesla, which is now about to be looked into by the biggest enemy of the crypto space - the Securities and Exchange Commission (SEC).
SEC, Tesla and Crypto
Senator Elizabeth Warren earlier this Monday sent a letter to Gary Gensler, Chair of the SEC, requesting an investigation from the regulatory body into Elon Musk's Tesla. Per the letter, Warren intended to investigate the company for its disclosures regarding the purchase of Twitter and the appointment of Elon Musk as its CEO.
Senator Warren’s requested letter to the SEC
This, according to the SEC, has raised concerns about conflict of interest, misappropriation of funds as well as other negative impacts on the shareholders. These allegations were received with mixed reviews from some backing Warren's demand for investigations, with others going after the Senator herself. A crypto trader by the name of Crypto King tweeted,
"Ohh the best insider trading senator in history wants an investigation?... She should be in jail, not in the govt.
The letter from Senator Warren, if paid heed to by the SEC, would lead to an investigation of Elon Musk’s Tesla. The timing of the letter was also quite interesting as just hours before the letter made its way to the public. Wells Fargo had raised the target price of each TSLA share from $170 to $265.
The letter also came to the attention of the members of the crypto community, which Elon Musk has had an influence in the past,. Back in 2021, Elon Musk and Tesla announced their decision to renounce Bitcoin as a purchase medium due to environmental concerns. That announcement resulted in one of the ugliest crashes of the crypto industry.
However, since then, Elon Musk's interest has aligned more with meme coins such as Dogecoin and AI tokens following the sudden surge in Artificial Intelligence (AI). DOGE first picked up pace last year following a mention from musk, whose repeated support for the same earned him the nickname “DOGEfather”.
Soon after DOGE began rallying as the meme coin almost became the next big thing as Tesla enabled payments for its merchandise on its website. But it all went away soon after when Musk’s enthusiasm eventually faded away.
Thus it is also possible that if Tesla was to face charges or investigations by the regulatory body, these markets are likely to take a hit. Fortunately, at the time of writing, both meme coins, as well as the AI crypto tokens, are noting minimal changes, with a decline of no more than 2% in each case.
AI tokens market cap change
In any case, investors should be wary going forward and if the SEC does go after Tesla, the crypto market could be in trouble, looking at potential losses if the interest refers to either of the mentioned assets.
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