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I'm not a lawyer. > If we look at it from stocks, if Tesla bought a million shares of random X penny stock, and then Elon Musk tweeted that this random penny s
by djoldman 6y ago
I'm not a lawyer.
> If we look at it from stocks, if Tesla bought a million shares of random X penny stock, and then Elon Musk tweeted that this random penny stock is now amazing. And then once it reached $10 they sold 10% at 1000% percent profit. That's illegal, so why is crypto not?
I'm pretty sure that is legal as long as you disclose that you own it. I think you're allowed to:
1. say: "I own a stock."
2. say: "It's a great stock."
3. (stock price goes up)
4. (sell stock)
And intuitively, this should be legal. If you disclose your position, you should be able to talk about how great it is, as long as you don't lie.
- dubcanada 6y agoHuh, you're right I went and double checked the law. What I said above is completely legal you just need to disclose you own X penny stock. So random person with a bunch of followers can legit buy a million dollars of a stock, go on twitter spouting about it (even though just the increase of mentions are likely to make it become more noticed and thus gain value) and make a bunch of money. That's fantastic...
- tim333 6y agoIt's buyer beware. Yeah if you own a thing and people will buy it off you at a high price when you tweet buy then you can make money.
- neom 6y agoYou can also legally do the inverse of this, short a stock, say you are short the stock, and then tell people how much the business sucks so it goes down and you make money.
- toomuchtodo 6y agoSee: Hindenburg Research, Muddy Waters Research
- atat7024 6y agoNot just "can", this happens on Twitter, Instagram, Stocktwits etc daily.
- jonplackett 6y agoIsn't this literally just what happened with wallstreetbets
- paxys 6y agoThere is a massive grey area where trading, advising, hyping and fraud all intersect. The SEC exists for the purpose of making these distinctions, but they don't cover Bitcoin (as far as I know).
- djoldman 6y agoHrm, I'm pretty sure that area is pretty small. If "advising" here means a fiduciary agreement, the laws are pretty cut and dry as far as I know: you have a duty to act in the interest of your client.
- martin_bech 6y agoIm also not a lawyer.. But I have a huge problem with thinking that Elons tweets about BTC is the primary mover of BTC vs USD.. The dollar value of BTC is basicly a random number generator..