Elon Musk and his company Tesla have successfully defended against a federal lawsuit alleging Dogecoin price manipulation, resulting in a significant win for both parties. The ruling was issued by U.S. District Judge Alvin Hellerstein in Manhattan on August 29.
The lawsuit, filed in June 2022, accused Musk and Tesla of using Musk’s public influence, including his Twitter activity and appearances on “Saturday Night Live,” to manipulate Dogecoin’s price for personal gain. The plaintiffs alleged that Musk sold Dogecoin during periods when his public actions, like changing Twitter’s logo to the Dogecoin Shiba Inu, were expected to boost its value, thereby engaging in insider trading.
The lawsuit sought $258 billion in damages, claiming that Musk’s endorsements and statements about Dogecoin were misleading and constituted market manipulation. However, Musk’s legal team moved to dismiss the lawsuit on March 31, 2023, dismissing the claims and the damage request as a “fanciful work of fiction.”
Judge Hellerstein’s ruling emphasized that Musk’s tweets about Dogecoin were “aspirational and puffery” rather than factual or actionable statements. He noted that these tweets, including claims about becoming Dogecoin’s official CEO and sending a physical Dogecoin to the moon via SpaceX, were misinterpreted and could not form the basis of a securities fraud claim.
The judge concluded that no reasonable investor could consider Musk’s tweets as sufficient grounds for alleging market manipulation or insider trading. As a result, the court dismissed the fraud allegations against Musk and Tesla. As of the ruling, Dogecoin was trading around $0.10, down 0.3% on the day.