Elon Musk and Tesla have successfully defended against a lawsuit that accused them of manipulating the price of Dogecoin, leading to $258 billion in alleged damages. A US District Court Judge dismissed the case, ruling that no reasonable investor could rely on Musk’s tweets for investment decisions.
Judge Dismisses Dogecoin Manipulation Claims
On August 29, US District Judge Alvin Hellerstein, presiding over the Southern District of New York, dismissed the lawsuit brought against Musk and Tesla by a group of Dogecoin investors. The plaintiffs had accused Musk of driving up Dogecoin’s price by over 36,000% within two years, only to let it crash, which they claimed amounted to a “Dogecoin Pyramid Scheme.”
The lawsuit specifically targeted Musk’s social media activity, including tweets where he jokingly referred to himself as the “CEO of Dogecoin” and mentioned sending a “literal” Dogecoin to the moon via a SpaceX vehicle. Judge Hellerstein ruled that these statements were mere “aspirational and puffery,” not factual claims that could mislead a reasonable investor.
The judge emphasized that “no reasonable investor” would rely on Musk’s tweets as the basis for sound investment advice, noting that the defendants had misrepresented Musk’s statements in their claims.
Lawsuit Deemed “Fanciful Work of Fiction”
The lawsuit was originally filed in June 2022, with investors seeking $258 billion in damages. Musk’s legal team filed a motion to dismiss the case in March 2023, arguing that the lawsuit was a “fanciful work of fiction” and that the claims lacked any real basis.
Despite the lawsuit’s dismissal, the price of Dogecoin remained relatively unaffected, showing only a minor 0.1% increase in the last 24 hours. As of the latest data from CoinGecko, Dogecoin is trading at $0.10, having declined 20% over the past month.
