New York: Elon Musk and his electric vehicle company, Tesla, have successfully won the dismissal of a federal lawsuit that accused them of defrauding investors by manipulating the cryptocurrency Dogecoin and engaging in insider trading. The lawsuit claimed that Musk and Tesla’s actions led to billions of dollars in losses for investors.
The ruling was handed down on Thursday night by U.S. District Judge Alvin Hellerstein in Manhattan.
The investors alleged that Musk used his influence on social media, particularly through Twitter posts, a 2021 appearance on NBC’s “Saturday Night Live”, and other high-profile stunts, to profit at their expense. They claimed that Musk and Tesla controlled several Dogecoin wallets and orchestrated trades that took advantage of Musk’s public statements and activities related to Dogecoin.
According to the investors, Musk deliberately inflated Dogecoin’s value by over 36,000% over a two-year period, only to let it crash later. They argued that Musk and Tesla timed their trades to coincide with Musk’s public comments, including an instance in April 2023 when Musk replaced Twitter’s iconic blue bird logo with Dogecoin’s Shiba Inu dog logo. This change reportedly caused Dogecoin’s price to surge by 30%, after which Musk allegedly sold off his holdings.
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In their defense, Musk’s legal team argued that the plaintiffs had failed to present a valid case despite filing five versions of the lawsuit over two years. The original lawsuit sought $258 billion in damages.
Musk’s lawyers contended that his tweets about Dogecoin were “innocuous and often silly”, and that there was no evidence to support the claim that Musk owned the two wallets where suspicious trading occurred, or that he or Tesla ever sold Dogecoin.
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During his “Saturday Night Live” appearance, Musk, while portraying a fictitious financial expert on the “Weekend Update” segment, referred to Dogecoin as a “hustle”.
