Elon Musk and Tesla Secure Dismissal of Dogecoin Fraud
A federal lawsuit accusing Elon Musk and his electric vehicle firm, Tesla, of defrauding investors by manipulating the price of Dogecoin has been effectively dismissed. The lawsuit, which requested $258 billion in damages, asserted that Tesla and Musk had engaged in insider trading and had exaggerated the cryptocurrency through a variety of public remarks and deeds, causing investors to suffer large financial losses.
U.S. District Judge Alvin Hellerstein delivered the decision on Thursday night in Manhattan. According to the investors, Musk fraudulently inflated Dogecoin’s price through his Twitter posts, a 2021 appearance on NBC’s “Saturday Night Live,” and other promotional stunts, enabling him and Tesla to trade profitably at the expense of other investors.
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Court Ruling on Dogecoin Fraud Allegations
The plaintiffs claimed that Musk purposefully increased Dogecoin’s price over the course of two years by more than 36,000%. Plummet later cited specific, such as when Musk changed the Dogecoin Shiba Inu dog logo from Twitter’s blue bird design in April 2023. The cryptocurrency’s price to soar 30% higher before Musk is said to have sold off his shares.
Judge Hellerstein did, however, dismiss the complaint with prejudice, so it cannot be reopened. According to him, Musk’s statements on Twitter, such as his assertions that Dogecoin is the “future currency of Earth,” that it can be used to purchase Teslas, or even that SpaceX can use it to fly people to the moon, were “aspirational and puffery, not factual and susceptible to being falsified.”
The court concluded that these representations could not reasonably be used as the basis for a securities fraud action by any investor.
Case Against Musk and Tesla
Further undermining the case against Musk and Tesla, the court also stated that it was “not possible to understand” The Investors‘ allegations of insider trading and market manipulation. Despite the plaintiffs’ four amendments to the complaint over a two-year period, the court finally decided in the defendant’s favor.
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Musk’s legal team contended that there was insufficient proof to back up the allegations that either Tesla or he was the owner of the relevant Dogecoin wallets or that they had engaged in questionable trading practices. After the decision, Alex Spiro, the lawyer for Musk, said, “It’s a very good day for Dogecoin.”
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