Crypto bulls challenge Elon Musk’s environmental concerns on bitcoin – but billionaire Mike Novogratz takes a softer stance

Elon Musk
Tesla CEO, Elon Musk.

The crypto community was swift to reject Elon Musk’s decision late on Wednesday to halt payment in bitcoin for Tesla vehicles due to environmental concerns, suggesting that renewable energy is largely used to mine the popular cryptocurrency.

“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a tweet Wednesday.

Here’s how some bitcoin bulls reacted to Musk’s announcement:

“Ironic because no incremental energy is used in a #bitcoin transaction. The energy is used to secure the crypto-asset network, and the net impact on fossil fuel consumption over time will be negative, all things considered.” – MicroStrategy CEO Michael Saylor.

“Elon probably did not research how much energy is required to run other (non crypto) currencies that Tesla accepts.” – Binance CEO Changpeng Zhao.

“Elon … you realize that 75% of miners use renewable energy, right? This energy story has been debunked over and over again.” – Morgan Creek Digital co-founder Anthony Pompliano.

“When Elon realizes that bitcoin mining is actually pushing the renewable energy industry forward, he will refresh position and #bitcoin will moon.” – co-founder and president at crypto exchange Gemini Cameron Winklevoss.

“FWIW, Bitcoin mining is a massive subsidy for renewable energy.” – co-founder and CEO at Gemini Tyler Winklevoss.

“We at Mavs.com will continue to accept BTC/Eth/Doge because we know that replacing gold as a store of value will help the environment and shrinking big bank and coin usage will benefit society and the environment.” – Dallas Mavericks owner and investor Mark Cuban.

Novogratz and El-Erian were less at odds with Musk:

“My take on @elonmusk is to take him at his word. He cares about the environment and he is using his considerable influence to push BTC mining towards a greener future. Lots of companies in the space have already been working on this. Stay tuned. And buy $BTC.” – Galaxy Digital CEO Mike Novogratz.

“This unexpected development has placed pressure on #Bitcoin. @elonmusk and @Tesla were front runners in the process of private sector adoption of the #crypto #currency, opening the way for others to follow. The reasons for this apparent U-turn are not yet clear.” – Allianz chief economist and president of Queens’ College, Cambridge University Mohamed El-Erian.

Musk appears to have changed his stance

The self-proclaimed “Technoking” had only recently agreed with Twitter boss Jack Dorsey by saying bitcoin “incentivizes” renewable energy. Dorsey’s Square payments company and Cathie Wood’s Ark Invest asset management firm had collaborated on research that suggested bitcoin mining isn’t environmentally-damaging.

Screenshot 2021 05 13 at 08.34.00

He now says Tesla will look at using other cryptocurrencies that take up less than 1% of bitcoin’s energy use for transactions.

Bitcoin dropped as much as 15% at one point following Musk’s tweet to trade around $46,350, but recovered to around $50,850 as of 3:45 a.m. ET on Thursday.

“In some capacity, distancing the brand from bitcoin could win some ESG love,” Chris Weston, head of research at Pepperstone Financial, said.

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Binance, the world’s largest crypto exchange, probed by CFTC over concerns it allowed US residents to trade derivatives

Changpeng Zhao
Binance CEO Changpeng Zhao


Cryptocurrency exchange Binance Holdings is being investigated by the Commodity Futures Trading Commission (CFTC) over concerns that it permitted US residents to trade derivatives, violating the agency’s regulations, Bloomberg first reported on Friday.

Binance, the world’s largest crypto exchange, is not registered with the CTFC to trade those types of securities. The agency counts cryptocurrencies such as bitcoin to be commodities and therefore oversees its futures and other derivatives.

The CTFC has yet to determine whether the cryptocurrency exchange did allow US residents to buy and sell derivatives. Thus far, Binance has not been accused of misconduct.

Binance, which was founded in China and has an office in Singapore, says it currently does not have a headquarters. For now, US residents are unable to access its website.

“We have always blocked US access, but users do find intelligent ways to get around our block sometimes and we just have to be smarter about the way we block,” company co-founder Changpeng Zhao told Bloomberg in November.

Zhao has, in the past, maintained that Binance complies with US laws. In 2019, Binance partnered with BAM Trading Services, which launched Binance.us in San Francisco. Binance licenses its matching engine and wallet technologies to Binance.us.

Still, many users find a workaround, especially amid the boom in bitcoin which has flirted with record highs on Thursday, breaching the $1 trillion market capitalization threshold. The founder told Bloomberg in a February television interview that his platform is attracting more than 300,000 user registrations a day, far surpassing its previous 2017 peak.

The heightened scrutiny against Binance and other crypto-related firms comes after lawmakers and watchdogs have raised their concerns about the rapidly evolving asset.

US Treasury Secretary Janet Yellen has publicly criticized bitcoin numerous times as well as ECB president Christine Lagarde.

In November last year, CFTC filed criminal charges accusing founders and executives of the BitMEX, a major cryptocurrency derivatives exchange of not taking sufficient steps to prevent money laundering.

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Binance, the world’s largest crypto exchange, appoints former US senator Max Baucus as government liaison

Crypto application.

Binance Holdings on Thursday announced it has appointed Maxwell Baucus, a former Senator for Montana, as its policy and government-relations adviser.

The 79-year-old Democrat will be providing high-level guidance to the world’s largest cryptocurrency exchange, bringing with him “a wealth of political and regulatory expertise” after more than 30 years in American politics, including a seven-year run as Chairman of the Senate Finance Committee, the statement said.

Baucus, who also served as US ambassador to China from 2014 to 2017, will “play a key role consulting and liaising with US regulators and authorities” on policies that will affect and impact the cryptocurrency ecosystem, the statement added.

“His experience at the highest levels of government and intimate understanding of global regulation brings exceptional value to Binance and enhances our already strong compliance and policy team,” Binance CEO Changpeng Zhao said.

The Malta-based company currently does not serve US residents. In 2019, it set up a San Francisco-based bureau in the hopes of addressing that.

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