Highlights:
- Musk and Tesla win dismissal of $258 billion lawsuit over Dogecoin fraud.
- The judge deemed Musk’s Dogecoin statements as mere puffery, not fraud or manipulation.
- Dogecoin price stable post-lawsuit dismissal; up 0.28% in 24 hours.
Elon Musk and his electric automotive company, Tesla, successfully dismissed a federal lawsuit that accused them of defrauding investors by rigging the cryptocurrency Dogecoin (DOGE). The ruling, made on August 29 by US District Judge Alvin Hellerstein in the Southern District of New York, is crucial for Musk and the crypto community. It raises questions about the future direction of Dogecoin’s price.
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According to Reuters, a U.S. federal court dismissed a lawsuit against Elon Musk and his company Tesla, which accused them of defrauding investors by exaggerating the value of Dogecoin and insider trading, resulting in billions of dollars in losses. Manhattan District Judge Alvin…
— Wu Blockchain (@WuBlockchain) August 30, 2024
Allegations of Market Manipulation and Insider Trading
The lawsuit, filed in June 2023, alleged that Musk and Tesla used social media and publicity to inflate Dogecoin’s price by over 36,000%. The plaintiffs claimed Musk then sold the cryptocurrency at its peak and allowed its value to plummet, resulting in investor losses. They sought $258 billion in damages, alleging that Musk’s actions amounted to insider trading and market manipulation.
Elon Musk — as well as Tesla and SpaceX — are being sued for $258 BILLION amid allegations they all played an instrumental role in running a 'Dogecoin pyramid scheme' 👀https://t.co/Cah4Qu9YhQ
— CoinMarketCap (@CoinMarketCap) June 17, 2022
Moreover, the suit highlighted Musk’s 2021 appearance on “Saturday Night Live,” where he played a financial expert and called Dogecoin “a hustle.” Additionally, investors noted Musk’s April 2023 decision to temporarily replace the Twitter logo with DOGE’s Shiba Inu dog, which led to a 30% price increase.
The plaintiffs argued that these actions were part of a scheme to profit from Dogecoin’s volatility by buying before public stunts and selling after price surges. On March 31, Musk requested the dismissal of the lawsuit, calling the $258 billion claims a “fanciful work of fiction.”
Judge Rules Musk’s DOGE’s Tweets Were ‘Puffery’ and Dismisses Fraud Claims
In an August 29 decision, Judge Hellerstein stated that Musk’s statements about Dogecoin were “aspirational and puffery, not factual,” and were “susceptible to being falsified.” The judge found that the facts did not support the plaintiffs’ allegations of a “pump and dump” scheme, market manipulation, or insider trading. He emphasized that it was “not possible to understand the allegations that form the basis” of these claims.
Moreover, he said the defendants made several “material misrepresentations” of Musk’s tweets about Dogecoin. These included claims that Musk would become the official CEO of Dogecoin and that he might send a “literal” Dogecoin to the moon on a SpaceX vehicle.
Consequently, the court sided with Musk, finding no direct evidence that he or Tesla profited from suspicious trades or engaged in wrongdoing. The ruling effectively ends a legal battle that sought $258 billion in damages. Alex Spiro, leading Musk’s legal team, said, “It’s a very good day for Dogecoin,” following the judge’s ruling.
Over the years, Musk has distanced himself from the cryptocurrency sector. Tesla, which previously accepted Bitcoin as payment, reversed this decision shortly after Musk’s SNL appearance. However, the company has reportedly retained its Bitcoin holdings, according to its Q1 2024 earnings report.
Dogecoin Price Remains Stable After Dismissal News
Following the dismissal news on August 29, Dogecoin’s price remained stable, increasing by just 0.28% in the last 24 hours. As of publication, Dogecoin is trading at $0.1 and has fallen 20% over the past month, according to the data from CoinMarketCap.
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