Elon Musk Might Face US Scrutiny Over Recent $44bn Twitter Buyout

The national security risks of the deal may be determined by the Committee on Foreign Investment in the United States.

Elon Musk Might Face US Scrutiny Over Recent $44bn Twitter Buyout
Elon Musk

Elon Musk agreed to foreign investment in his buyout of Twitter, which potentially invites the same scrutiny regarding national security as TikTok did.

Cyprus’s sovereign wealth fund and Binance, the world’s biggest cryptocurrency exchange founded by Chinese native Changpung Zhao, are investing in the acquisition of twitter.

Reuters had a panel of lawyers, none of whom are involved in the CFIUS go over the deal for potential national security concerns. They said that it might give the committee an opportunity to give the acquisition a thorough review.

To the extent that Musk’s proposed acquisition of Twitter includes foreign investment, his plan to purchase the company could be subject to scrutiny from a US federal agency.

The US Treasury Department said it would not provide comment on the potential scrutiny of Musk’s Twitter deal by the US National Security Panel.

Representatives for Musk, bin Talal, Qatar, and Binance did not respond to requests for comment.

Trump’s administration used CFIUS to force ByteDance to divest of TikTok in 2020 but Biden abandoned that project when ByteDance promised to change the data protection.

The lawyers interviewed by Reuters said that the risk of CFIUS blocking this deal is small because Musk will control Twitter when it is acquired and the foreign investors only have a small stake.

They noted that they would only change their assessment if Musk gave the foreign investors control of the company.

Richard Sofield on Twitter’s potential to store the content of personal electronic communications.

CFIUS may find Tesla’s dealings with as a bit worrisome. China is where the company manufactures and sells their automobiles, for example.

China’s government has blocked Twitter in the past to restrict Chinese citizens from publishing information, yet there are many high-level officials who have profiles on the platform.

“One of the considerations would be whether or not China could leverage its business activity to achieve a desired outcome,” Sofield added.

Experts scrutinize Elon Musk’s latest use of Twitter as a funding platform

CFIUS denied Broadcom’s acquisition of Qualcomm in 2018, citing the potential risk that Broadcom’s strong connections to foreign businesses could negatively impact Qualcomm.

The White House was worried that a Singapore-based company should necessarily worry about “third party foreign entities” which would be detrimental to the US’ technological advances.

Nevena Simidjiyska, a law firm in Philadelphia, said foreign entities can influence U.S. investors by buying out their stakes in companies.

You may need to go through the CFIUS requirement if you are a US investor of Twitter.

Elon Musk’s Twitter deal does not face significant antitrust scrutiny.

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