Musk clears charges: Elon Musk and his company, Teslahave fended off a federal lawsuit accusing them of defrauding investors by manipulating the Dogecoin cryptocurrency and using insider trading. Manhattan-based U.S. District Judge Alvin Hellerstein handed down the ruling late Thursday. The suit, filed by investors, alleges that Musk, the world’s richest individual, used his Twitter account, a 2021 appearance on NBC’s “Saturday Night Live” and other public appearances to artificially inflate the value of Dogecoin, ultimately leading to significant financial losses for investors.
Dogecoin surge allegations
The plaintiffs claimed that Musk drove up the cryptocurrency’s price by more than 36,000% over two years, only to let it crash, timing transactions to coincide with his public statements and activities related to Dogecoin. One specific case highlighted was Musk’s sale of Dogecoin in April 2023 after he changed Twitter’s logo to the image of the Dogecoin Shiba Inu, which caused the coin’s value to rise by 30%. Judge Hellerstein ruled that Musk’s comments about Dogecoin being the future currency of Earth and the possibility of using it to buy Teslas or being launched to the moon by SpaceX were considered “aspirational” rather than factual claims. As such, they did not meet the criteria for securities fraud. The judge also found that investors’ claims of market manipulation and insider trading were unclear and unsubstantiated.
Case permanently dismissed
The lawsuit was dismissed with prejudice, meaning it cannot be refiled. The investors had originally sought $258 billion in damages and had revised their suit several times over the past two years. Musk’s attorney, Alex Spiro, described the ruling as a positive outcome for Dogecoin. He emphasized that Musk’s tweets were harmless and often humorous, with no evidence showing Musk controlled suspicious trading portfolios or that Tesla Musk had been involved in the sale of Dogecoin. During his appearance on “Saturday Night Live,” Musk had referred to Dogecoin as a “scam” in a comedy skit. Since purchasing Twitter in October 2022 and rebranding it as X, Musk has maintained a high profile, with a net worth estimated at $239.3 billion by Forbes.(With contributions from Reuters)
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