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Cryptocurrency Price Check: Musk Tweet Sparks Price Rise

Cryptocurrency gets a boost after Tesla CEO Elon Musk says he wants miners to use about 50% clean energy.

Cryptocurrency prices were moving higher Monday after Tesla  (TSLA) - Get Report Chief Executive Elon Musk said the electric-vehicle maker would again enable transactions once the digital currency is more cleanly mined.

Bitcoin, the world's largest cryptocurrency, was 9.1% higher at $39,277, according to Coingecko. 

Ethereum was up slightly to $2,487 and Dogecoin advanced marginally to 32 cents.

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Prices began rising after Musk said in a tweet that he wants miners to use about 50% clean energy. Musk criticized the digital currency for being an energy hog and relying too much on fossil fuels.

The tweet was a response to another post suggesting Musk's recent back-and-forth positions on Bitcoin were “market manipulation,” and that his comments should have prompted an investigation by the Securities and Exchange Commission.

Musk's tweet also reiterated his defense of having sold 10% of the electric vehicle maker's Bitcoin stash in the first quarter.

Meanwhile, the Department of Justice said last week that it had seized most of a ransom payment made by Colonial Pipelines last month, after a ransomware attack forced the shutdown of the largest pipelines supplying energy to the East Coast.

The department said it recovered 63.5 of the 75 bitcoins in ransom the company paid -- valued at about $4.4 million at the time it was paid.

David Lesperance, managing partner of Lesperance & Associates, said that with "Bitcoin and other cryptocurrencies exploding in value and the public’s awareness, it was not surprising that the [Internal Revenue Service] launched Operation Hidden Treasure," the agency's effort to root out tax evasion among cryptocurrency users.

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"Those with undisclosed crypto holdings then separated into two camps," Lesperance said. 

"The first camp was those who recognized that they needed to get their fiscal house in order BEFORE the IRS (or other tax authorities) came knocking."

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The second camp, he added "clung to the mistaken mythology that crypto was the perfect tax haven and they had nothing to worry about."

"That delusion blew away like the morning mist when the US government disclosed that they had tracked and seized the crypto involved in a recent ransomware attack," he said.

Last month, the State Council's Financial Stability and Development Committee said China would crack down on bitcoin mining and trading activities as part of efforts to fend off financial risks.

China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.

Winston Ma, adjunct professor at New York University School of Law and author of "The Digital War-How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace,' said, "China market controls 70% of global hashrate for bitcoins and crypto assets, so its rising regulation simply cannot be ignored by the crypto markets."

"It seems that China put more focus on the computation power of its national data center network," he said. 

"[And] whereas China’s mining regulation has already made the impact, the market is still waiting for the another shoe to drop relating to crypto trading, as China has also taken steps to restricting crypto-related capital flows in its financial system."