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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

Elon Musk’s Controversial Crypto Tweets – Are they Market Manipulation?

Author: Syedur Rahman  27 May 2021
3 min read

Rahman Ravelli outline what can be considered market manipulation.

On the 12 May 2021, Elon Musk, the billionaire tycoon, sparked controversy in the crypto space by tweeting the following: 

Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin and transactions, especially coal, which has the worse emissions of any fuel. 

Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.  

Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more suitable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.

This tweet caused shockwaves in the crypto space and we understand it is said to have contributed to a dramatic fall in the value of Bitcoin, as a result of the perceived negative impact Bitcoin has on the environment. Similarity, his positive endorsement of DOGE saw its price rise. 

Elon Musk has often endorsed cryptocurrencies on social media in the past. But through a recent series of announcements, tweets and “Saturday Night Live” quips in May, the electric car marker and its CEO have sent the value of a number of cryptocurrencies on wild rides. 

Some might wonder whether all that signalling amounts to market manipulation. Certainly, Musk has form. In 2018 he was ordered to pay a $20 million fine to the U.S. Securities and Exchange Commission over misleading tweets about Tesla stock. 

But, what is the legal position? 

The Law 

Market Manipulation in the UK can be approached in both a civil and criminal context. 

The Civil Regime

The Market Abuse Regulation (MAR), an EU regulation, contains a prohibition of market manipulation (Article 15). MAR came into force in the UK following the commencement of the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 on 3 July 2016.

Article 12 of MAR specifies that market manipulation includes the following activity:

  1. Entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances, which employs a fictitious device or any other form of deception or contrivance.

Section 123 of the Financial Services and Markets Act 2000 (FSMA), as amended, allows the FCA to impose a penalty on a person that it is satisfied has contravened the prohibition on market manipulation as defined in Article 15 of MAR. Alternatively, the FCA can choose to publish a public statement censuring the person.

In addition, FSMA allows the FCA to apply to the High Court for an injunction restraining actual or likely contravention of Article 15 of MAR by an individual; ordering the individual to remedy the contravention and/or restraining any assets which the individual is likely to dispose of, or otherwise deal with.

The Criminal Regime

The principal market manipulation criminal offences are contained within Part 7 of the Financial Services Act 2012. These are as follows:

  1. Making misleading statements (section 89) – It is an offence for a person to make a statement or to conceal facts with the intention of inducing another person either to enter into or to refrain from entering into a relevant agreement, or to exercise or refrain from exercising any rights conferred by a relevant instrument.

    The offence is committed if the person who makes the statement knows it to be false or misleading, if the person is reckless as to whether his conduct may so induce, or if the person dishonestly conceals the material facts.
  2. Misleading impressions (section 90) – It is an offence for a person to act or engage in a course of conduct which creates a false or misleading impression as to the market in, or the price or value of, any relevant investments.
    The person must intend to make the impression and intend either to induce another person to acquire, dispose of, subscribe for the investments, or to make a gain for himself or cause loss to another or be aware that it is likely to have that result.

These offences carry a maximum punishment of 7 years imprisonment and/or an unlimited fine.

In addition to the above, Section 2 of the Fraud Act 2006 can also be applied to market manipulation cases.


Musk’s latest series of tweets, announcements and quips could, from both a civil or criminal prospective, be perceived as market manipulation as his actions could be viewed as either  “behaviours” which “affects or is likely to affect the price of one or several financial instruments” or “misleading impressions” which “induce another person to acquire, dispose of, subscribe for the investments”. 

Either way, the legal question is probably less significant than the simple reality that Musk clearly has the crypto space on what appears to be some sort of ‘rhetorical leash’. His apparent influence over the crypto space, and the markets in general, hasn’t been fettered since his last fine from the SEC. And it’s unlikely that any subsequent enforcement action, if it was to follow, would have any effect on this. 


  1. Elon Musk Twitter
  2. The Fraud Act 2006 
  3. Part 7 - Financial Services Act 2012
  4. Market Abuse Regulation 
  5. The Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 
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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.

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