The tweet that the Tesla CEO released Sunday was part of an exchange with twitter users that omitted to refer to a CoinTelegraph article accusing him of “bitcoin manipulation.” Musk said that the company kept $1.5 billion of its initial investment in bitcoin, but sold about 10% to “confirm it’s easy to pay off.” [bằng bitcoin] without distorting the market”. Elon Musk has become a prominent and influential figure in the crypto world. He tweeted in May that Tesla would no longer accept bitcoin as a means of payment for its vehicles, citing the large amount of carbon emissions in bitcoin mining. esla will continue to allow transactions in bitcoin at the car manufacturer’s stores, once it is confirmed that the “mining” energy source is clean energy. Photo: Getty. This action is believed to be the cause of the sell-off of the world’s No. 1 cryptocurrency. Musk’s comments on the sustainability of bitcoin “mining” continue to resonate in the crypto community. A commonly cited metric from the University of Cambridge pegged the annual electricity consumption of bitcoin mining at around 99 terawatt-hours. This consumption is more than that of the Philippines or Pakistan. Some of Musk’s recent tweets have also sparked a mix of excitement, confusion, apprehension, and sometimes even fear in the crypto community. Earlier this month, investors attempted to analyze a mysterious tweet from SpaceX that included a bitcoin symbol and a broken heart emoji. The information that Elon Musk transmits has had a great influence on the price of dogecoin and bitcoin. Musk is also partly blamed for the current drop in bitcoin and the broader cryptocurrency complex. The Wall Street Journal has described him as the biggest influence on bitcoin. By the end of June 13, the bitcoin price was up nearly 8%, changing hands at $38,808.09 on CoinDesk. As of now, Bitcoin is up over 28% for the year but is down about 40% from its mid-April peak at $64,829.14. The world’s No. 2 cryptocurrency, Ethereum, gained nearly 5%, changing hands at $2,521.81. Back in February, Tesla revealed that it had acquired about $1.5 billion in bitcoin in a filing with the Securities and Exchange Commission. At the time, Tesla paid about $38,000/bitcoin for each bitcoin. This is the average price at the time of Tesla’s Q4 conference on January 27. This conference did not mention any bitcoin holdings and the date of filing with the SEC. Overall, the prices of digital assets like bitcoin are outperforming traditional markets.

On June 13, Tesla CEO tweeted that he will accept Bitcoin electric vehicle payments again. However, this only happens when Bitcoin miners can prove that about 50% of the energy they use is clean energy. According to Reuters, Bitcoin price increased 5% to 37,360.63 USD at 1:10 am on June 14 (Vietnam time) after Mr. Musk’s tweet. Musk also said that Tesla will sell about 10% of its Bitcoin holdings to show that Bitcoin can be easily liquidated. During the first quarter of the year, Tesla sold about $272 million in “virtual assets,” which reduced its operating loss by $101 million. Tesla CEO comments about cryptocurrencies often cause price fluctuations. As a result, he was criticized by CEO Magda Wierzycka of asset management company Sygnia as a “market manipulator” and that the US Securities and Exchange Commission (SEC) should investigate. In February, Tesla revealed in an SEC filing that it had purchased $1.5 billion in Bitcoin and would accept Bitcoin as payment for its products. However, then the electric car company paused due to concerns about the method of mining virtual currency, which requires huge electricity consumption, affecting climate change. “We are concerned about the rapidly increasing use of fossil fuels to mine and trade Bitcoin, especially coal, which is the worst emitter,” Musk tweeted in May. Du Lam (According to Reuters)

Family offices: practically unregulated

The advantage of a so-called family office in which investors manage their own assets is that they are practically not subject to any regulatory or disclosure requirements. This is different with other constructions such as hedge funds that do business with other people’s assets: They must be registered with the US Securities and Exchange Commission and report quarterly on the investments in their portfolio. They are also obliged to disclose data on the ownership structure, assets under management and contacts with banks. For wealthy private individuals, a family office is therefore an ideal opportunity to move billions away from the public and regulatory authorities and to do business that should not necessarily be known. Which super-rich would like their investments to be discussed in detail by a broader public? This is also the reason why very few details are known about Hwang’s bets. The trigger for the problems at Archegos was apparently the price development of the share of the US media company ViacomCBS. Credit Suisse and the Japanese bank Nomura were particularly hard hit. Competitors such as Morgan Stanley, Goldman Sachs, JP Morgan or Deutsche Bank, who also had business relationships with Archegos, were able to get themselves to safety in good time.

The warning ignored

For Hwang, the secretive nature of a family office is likely to have been a major factor, as he has repeatedly come into conflict with laws in his investor life. In 2012, the US Securities and Exchange Commission accused him of insider trading. Hwang had to pay $ 44 million to get this done. Hwang has learned a painful lesson, he would be well advised to heed this warning, SEC Director Robert Khuzami advised him in the Securities and Exchange Commission notice. Khuzami’s warning went unheeded: In 2014, a court in Hong Kong banned him from trading stocks there for four years after Hwang admitted using inside information when trading Chinese bank stocks. In 2013 he founded his family initiative Archegos Capital.

Family offices are becoming increasingly popular

Family offices are playing a growing role as actors in the financial markets. Of course, many wealthy families do not want to increase their capital in extremely risky ways – and in the process get shipwrecked like Hwang. The aim is to manage the capital for years to come and generate returns. Most family offices are interested in long-term investments, as a study by the Insead business school found. A 2019 study by analyst firm Campden Research said they managed roughly $ 6 trillion in assets worldwide. In 2020, the family office of the Walton family, the founding family of retailer Walmart, was at the top with more than $ 160 billion in assets under management. According to estimates by the consulting firm EY, there are currently around 10,000 family offices around the world. The trend has been increasing for years. Most family offices have been created in the past 20 years, according to Insead. According to the experts at the consulting firm KPMG, one reason for the popularity is simply the fact that there are more and more wealthy families.

Where were the regulators?

The collapse of Archegos could now bring the issue of regulation of family offices on the agenda: The massive transactions and losses would raise questions that affect the banks and their relationship with Archegos, commented the Democratic US Senator Sherrod Brown on the incidents. The treatment of family offices should also be questioned. The “Financial Times” quotes Mark Sobel, chairman of the US think tank OMFIF, a longstanding and high-ranking employee in the US Treasury. He agrees with Brown: Archegos raise fundamental questions about the suitability of banks’ risk management. The regulatory perspective on the interactions between banks and non-banks should also be examined – to which, as we have seen, family offices have long belonged as powerful players in the financial markets. ECB director Isabel Schnabel told “Spiegel” that the collapse shows that there are significant regulatory gaps in funds. “Fortunately, it has only been a single fund so far. Nevertheless, this is a warning signal that there are considerable systemic risks here that need to be better regulated.” So why do banks provide at least a seedy figure like Hwang with credit billions that he can gamble away on dubious bets? And why doesn’t a supervisory authority know anything about it? Questions that should be answered quickly.