Elon Musk, Tesla Dodge Dogecoin Fraud Allegations as $258B Lawsuit Is Thrown Out
Judge Hellerstein sided with Musk, ruling that his tweets were "aspirational and puffery, not factual and susceptible to being falsified." (Photo by Justin Sullivan/Getty Images)
Key Takeaways
- Tesla chief Musk won a lawsuit against him in 2022, alleging Dogecoin price manipulation.
- A judge ruled Musk’s tweets were aspirational and puffy but not with a fraudulent intent.
- Musk was known for tweeting about Dogecoin from time to time.
Elon Musk now has one less lawsuit to worry about.
On Friday, Aug. 30, in a relief for the Tesla chief, a US District judge dismissed a class action lawsuit accusing him and his EV company of fraud related to their alleged role in manipulating Dogecoin’s (DOGE) price.
Judge Says Musk’s Tweets Aspirational, Not Fraudulent
The $258 billion lawsuit , filed in June 2022, alleged that Musk had engaged in a pump-and-dump scheme, using his massive social media following to artificially inflate DOGE’s price by over 36,000% before dumping his holdings on the market and causing a subsequent crash.
The plaintiffs claimed that Musk’s tweets had constituted a form of market manipulation, amounting to insider trading and a pyramid scheme.
In April 2023, Musk’s legal team filed a motion to dismiss the lawsuit, arguing that the allegations were a “fanciful work of fiction” based on the billionaire’s “silly tweets” about the meme coin.
Musk’s lawyers contended that the tweets were simply expressions of optimism about DOGE’s potential rather than actionable investment advice.
On Friday, Judge Hellerstein sided with Musk, ruling that his tweets were “aspirational and puffery, not factual and susceptible to being falsified.”
The judge found that the plaintiffs had failed to demonstrate a clear link between Musk’s tweets and the alleged market manipulation and that the claims of insider trading and a pyramid scheme were unfounded.
Elon Musk’s Notorious Dogecoin Era
The 2021-22 bull run was a different time that marked the beginning of the memecoin era.
The Tesla CEO rode the memecoin bandwagon, appointing himself as the unofficial CEO of the Dogecoin community.
Memecoins then reacted sharply to Musk’s direct and indirect mentions about the Dogecoin.
The price of the DOGE token moved in triple digits on weekly charts after Musk’s tweets at one point. However, the price decline was more severe than the surge, leaving several retail investors in the dust.
Many crypto enthusiasts and lawmakers warned the Tesla chief against such tweets.
However, Musk didn’t pay much heed to such warnings.
With time, Musk lost power over the memecoin and its price movement as the Dogecoin price saturated.
As of today, even a significant and direct tweet from Musk doesn’t move Doge’s prices. In some cases, if there is a notable price movement, it is immediately nullified by the price correction.
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