U.S Court Dismiss $258B Dogecoin Manipulation Lawsuit Against Elon Musk

A United States court has dismissed the lawsuit against Elon Musk and his electric automotive company, Tesla, which accused them of manipulating the price of Dogecoin.

The class-action lawsuit, filed in June 2022, sought $258 billion in damages. It alleged that the billionaire and his firm engaged in a cryptocurrency pyramid scheme.

Judge Dismiss the Lawsuit

In an August 29 decision, Judge Hellerstein dismissed the lawsuit, saying that the defendants made several material misrepresentations of Musk’s tweets about Dogecoin. This included statements such as Musk saying he would become the official CEO of Dogecoin.

“These statements are aspirational and puffery, not factual, and susceptible to being falsified and no reasonable investor could rely upon them,” he stated.

The judge further said that it is impossible to comprehend the claims that the plaintiffs used to support their conclusions about market manipulation, pump-and-dump schemes, and insider trading as a breach of fiduciary duty.

Notably, the judge dismissed the case with prejudice, meaning it cannot be returned to court.

Genesis of the Lawsuit

The lawsuit dates back to June 2022, when a group of disgruntled Dogecoin investors sued Musk and Tesla for a staggering $258 billion in damages. 

The investors alleged that Elon used X (formerly Twitter) posts to manipulate Dogecoin’s price to his advantage. They further claimed that the change of Twitter’s blue bird logo to the memecoin was another calculated effort to cash in on the token, noting that the Tesla CEO withdrew $124 million worth of Dogecoin after the action caused a 30% price spike.

Earlier this year, Musk requested that the lawsuit be dismissed. His lawyers described the claims and the request for $258 billion in damages as a “fanciful work of fiction.” They argued that the Tesla CEO’s support for Dogecoin on social media alone was too vague to quantify as allegations of fraud.

Dogecoin’s price did not react to the lawsuit’s dismissal. The token had increased slightly by 0.58% at press time, trading at $0.1012.