Elon Musk and Tesla Secure Dismissal of Lawsuit Alleging Dogecoin Manipulation

According to a recent Reuters report, Elon Musk and Tesla have won the dismissal of a federal lawsuit accusing them of defrauding investors through the promotion of Dogecoin and engaging in insider trading that allegedly led to billions in losses. The ruling was made by U.S. District Judge Alvin Hellerstein in Manhattan on Thursday night.

The investors had claimed that Musk, the world's richest person, manipulated dogecoin’s price by making public statements and appearances, including on NBC's "Saturday Night Live" in 2021, where he called dogecoin a "hustle." They argued that Musk and Tesla profited by strategically trading dogecoin through several wallets they controlled, often timed with Musk’s public endorsements or activities related to the cryptocurrency. One such instance occurred in April 2023, when Musk replaced Twitter's blue bird logo with the dogecoin Shiba Inu dog, causing dogecoin's price to jump 30%, and allegedly sold dogecoin shortly after.

Judge Hellerstein, however, found that Musk's statements about dogecoin—such as it being the future currency of Earth or that it could be flown to the moon by SpaceX—were merely "aspirational and puffery," not concrete facts on which a reasonable investor could base a securities fraud claim. He further stated that the investors' claims of market manipulation and insider trading were too vague to be understood.

The lawsuit was dismissed with prejudice, preventing it from being filed again. Originally, the investors sought $258 billion in damages and had amended their complaint four times over the past two years.

Musk's lawyer, Alex Spiro, responded positively to the ruling, stating, "It's a very good day for dogecoin." Musk's defense team argued that his comments about dogecoin were "innocuous and often silly" and emphasized the lack of evidence proving that Musk or Tesla owned the wallets involved in suspicious trading or had ever sold dogecoin.

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Reuters