Elon Musk’s Tesla Faces Scrutiny Over Potential Conflict of Interest in $1.5 Billion Bitcoin Purchase

Tesla comes under heightened scrutiny for its $1.5 billion bitcoin purchase. The Tesla board member who reportedly approved the company’s bitcoin acquisition is a cryptocurrency investor who also sits on the boards of two major cryptocurrency companies.

Experts raise questions about conflict of interest in buying Tesla Bitcoins.

Tesla is under intense scrutiny over its bitcoin purchase as experts question whether there is a conflict of interest surrounding the director who approved the company’s large bitcoin purchase, The Telegraph reported Tuesday. Tesla recently announced that it bought $1.5 billion worth of bitcoins in January and plans to use the crypto currency as a payment method for its products soon.

The conflict of interest came to light when it was revealed that the Tesla executive who approved the purchase of the Bitcoin company was also a crypto investor with ties to two crypto companies, the statement said. Antonio Gracias is listed on Tesla’s website as an independent director and member of the audit committee that approved the bitcoin deal with Tesla. He is a longtime friend of Musk’s, invested in Tesla in 2005 and has been on the company’s board of directors since 2007.

Gracias is also the founder, CEO and CIO of investment firm Valor Equity Partners, which has invested in two cryptocurrency companies. The first company is the provider of deposit services for cryptocurrencies Bitgo and the second is the trading platform for derivatives of cryptocurrencies Erisx. He also sits on their board of directors. The publication adds that Gracias was previously an investor in another cryptocurrency company, token platform Harbor, which acquired Bitgo last year. The news station reports:

Corporate governance experts have noted that role sharing creates a potential conflict of interest that should cause him to withdraw.

Charles Elson, professor of finance at the University of Delaware, said: Reason would dictate that an apology must be made in such circumstances.

Bill Klepper, professor of management at Columbia Business School, explains: If there is direct conflict or the appearance of conflict, it is best to stay out of the way. The right thing to do would be to seek legal advice. We don’t know if he did it or not. He continued to voice his opinion:

We need to find out if he’s acting in good faith or not. It’s the lack of transparency that makes people question your ethics.

Gracias also sits on the board of directors of Spacex, Musk’s rocket company, the statement added, noting that he will be leaving Tesla this year.

Lawyers recently warned that Tesla CEO Elon Musk could be investigated by the US Securities and Exchange Commission (SEC) over the electric car company’s purchase of bitcoins. Meanwhile, the value of Tesla’s bitcoin holdings has increased significantly, as the price of BTC has risen from around $30,000 to $40,000 in January to $52,408 at the time of writing.

Do you think there was a conflict of interest when Tesla bought bitcoins? Let us know your comments in the section below.

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