Tesla is facing more scrutiny over its $1.5 billion dollar bitcoin purchase. A Tesla board member who reportedly approved the companyâ€™s bitcoin buy deal is a cryptocurrency investor who also sits on the boards of two major crypto firms.
Experts Question Conflict of Interest in Teslaâ€™s Bitcoin Purchase
Tesla is further under scrutiny over its bitcoin purchase as experts now question whether there is a conflict of interest surrounding a director who approved the companyâ€™s big bitcoin purchase, the Telegraph reported Tuesday. Tesla recently revealed that it bought $1.5 billion worth of bitcoin in January and plans to accept the cryptocurrency as a form of payment for its products in the near future.
The conflict of interest question surfaced when it emerged that a Tesla director who approved the companyâ€™s bitcoin buy is also a crypto investor with ties to two crypto firms, the publication described. Antonio Gracias is listed on the Tesla website as an independent director and a member of the audit committee that signed off Teslaâ€™s bitcoin deal. A long-time friend of Musk, he invested in Tesla in 2005 and has been on its board since 2007.
Gracias is also the founder, CEO, and chief investment officer of investment firm Valor Equity Partners, which has invested in two crypto companies. The first company is crypto custody service provider Bitgo and the other is crypto derivatives trading platform Erisx. He also sits on their boards. The publication added that Gracias was previously an investor in another crypto firm, the tokenization platform Harbor, which Bitgo acquired last year. The news outlet conveyed:
Charles Elson, a finance professor at the University of Delaware, said: â€œGood prudence would have suggested a recusal in those circumstances.â€
Bill Klepper, a professor of management at Columbia Business School, explained: â€œIf thereâ€™s any direct conflict or appearance of that, you better stay armâ€™s length away from it. The right thing to have done would be to get the advice of legal counsel. We donâ€™t know if heâ€™s done that or not.â€ He further opined:
Gracias also sits on the board of Muskâ€™s rocket company, Spacex, the news outlet added, noting that he is stepping down from Tesla this year.
Recently, lawyers warned that Tesla CEO Elon Musk could be probed by the U.S. Securities and Exchange Commission (SEC) over the electric car companyâ€™s bitcoin purchase. Meanwhile, the value of Teslaâ€™s bitcoin stash has appreciated substantially as the price of BTC surged from around the $30K to $40K level in January to $52,408 at the time of writing.
Do you think there was a conflict of interest over Teslaâ€™s bitcoin buy? Let us know in the comments section below.
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