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A federal judge dismissed a lawsuit accusing Elon Musk and Tesla of manipulating the price of dogecoin through insider trading and public stunts, dealing a decisive legal victory to Musk and his electric vehicle company.
Musk, Tesla Prevail in Dogecoin Lawsuit
A federal lawsuit that had accused Elon Musk and Tesla of causing billions of dollars in losses to investors through insider trading and promoting the cryptocurrency dogecoin was dismissed after Elon and Tesla's electric vehicle firm prevailed.
Judge Alvin Hellerstein of the United States District Court in Manhattan handed down the ruling late Thursday night.
Investors Accused Musk of Profiting from Dogecoin
The wealthiest man in the world was accused by investors of trading dogecoin profitably through many wallets that were either owned by him or Tesla, using publicity stunts like a 2021 appearance on NBC's "Saturday Night Live" and tweets to their advantage.
They further claimed that Musk purposefully caused the price of dogecoin to rise by more than 36,000% over the course of two years before allowing it to fall and that he and Tesla frequently timed trades in response to Musk's public remarks and actions pertaining to dogecoin.
Dogecoin's 30% Spike Attributed to Musk
This, according to investors, encompassed Musk's April 2023 sale of dogecoin, which saw a 30% increase in price due to the dogecoin Shiba Inu dog emblem replacing Twitter's blue bird logo, Reuters reports.
On the other hand, Hellerstein argued that Musk's claims about dogecoin being the Earth's future currency, its potential usage in purchasing Teslas, and its ability to fund SpaceX's lunar missions were "aspirational and puffery, not factual and susceptible to being falsified."
According to the judge, this meant that the tweets could not be used as evidence in a securities fraud claim. Claims of insider trading and market manipulation by the investors were also dismissed as "not possible to understand" by him.
Per Yahoo Finance, the complaint cannot be re-filed because Hellerstein dismissed it with prejudice. The investors had revised their complaint four times in the span of two years, initially seeking $258 billion.
Requests for response were not promptly responded to by the investors' lawyers.
According to an email message from Musk's lawyer Alex Spiro: "It's a very good day for dogecoin."
Musk’s Legal Team Denies Wrongdoing
The legal team representing Musk is requesting his dismissal on the grounds that his "innocuous and often silly tweets" do not constitute wrongdoing.
Aside from denying that Musk or Tesla ever sold dogecoin, they also said there was no evidence that he possessed two wallets for questionable trading.
"Weekend Update" featured Musk as a fictional financial expert, and he referred to dogecoin as a "hustle" during his appearance on "Saturday Night Live."
Musk renamed Twitter X after purchasing the company in October 2022. Forbes estimates his net worth to be $239.3 billion.
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