Highlights
- Elon Musk, Tesla win dismissal of Dogecoin fraud lawsuit, no proof of insider trading found
- Court rejects $258 billion claim against Musk for Dogecoin market manipulatioN.
- Dogecoin price stabilizes at $0.1006 following legal victory for Musk and Tesla.
Tesla CEO Elon Musk has successfully secured the dismissal of a federal lawsuit accusing him and Tesla of defrauding investors through the promotion and trading of the cryptocurrency Dogecoin.
The legal decision, issued by a U.S. District Judge in Manhattan, marks a significant development for both Musk and the cryptocurrency community, leaving questions about the future direction of Dogecoin’s price.
Elon Musk Wins Dogecoin Trading Lawsuit Dismissal
According to a Reuters report, Elon Musk and Tesla, Inc. have won the dismissal of a lawsuit filed in Manhattan federal court, which accused them of manipulating the price of Dogecoin for personal gain.
Investors had alleged that Musk and Tesla engaged in insider trading and used publicity stunts, including social media posts and television appearances, to inflate the price of the cryptocurrency by over 36,000% before allowing it to crash. The lawsuit claimed that the Tesla CEO profited by selling the cryptocurrency at its peak after orchestrating the market movements.
The dismissal, issued by U.S. District Judge Alvin Hellerstein, came after investors struggled to substantiate their claims across five different versions of the lawsuit filed over two years. Musk’s legal team argued that there was no concrete evidence to prove that Elon Musk or Tesla owned the wallets involved in the alleged trading activities or that any misconduct occurred in relation to Dogecoin.
Allegations of Insider Trading and Market Manipulation
The lawsuit detailed how the Tesla CEO allegedly manipulated the market value through various high-profile actions, including a 2021 appearance on NBC’s “Saturday Night Live” where he called Dogecoin a “hustle” while portraying a fictitious financial expert. The plaintiffs claimed these actions were part of a broader scheme to profit from the crypto’s volatility by purchasing the it before public stunts and selling it after prices surged.
Investors specifically pointed to Elon Musk’s decision in April 2023 to temporarily replace the Twitter logo with DOGE’s Shiba Inu dog, which caused the price to rise by 30%. They alleged that this maneuver allowed Musk to sell the token at an inflated price. However, the judge found that the plaintiffs did not provide sufficient proof that these activities amounted to fraud or that the SpaceX’s CEO statements on social media were intended to mislead investors.
Musk’s attorneys argued that his tweets and public statements about the cryptocurrency were “innocuous and often silly,” rather than a calculated effort to create a pyramid scheme or manipulate the market. They asserted that Musk’s social media behavior, including his well-known affinity for memes, was not a violation of securities law. The legal team further argued that the plaintiffs had not demonstrated any direct link between Musk’s social media activity and specific trading outcomes that would constitute insider trading.
Consequently, the court ultimately sided with Musk, agreeing that there was no direct evidence that he or Tesla profited from suspicious trades or that any wrongdoing occurred. The ruling effectively puts an end to a legal battle that once sought a massive $258 billion in damages.
Closure of X Headquarters Adds to Musk’s Eventful Week
Concurrently, X (formerly Twitter) and also owned by Elon Musk, announced it would be closing its San Francisco headquarters on September 13. The building, which became the company’s global headquarters in 2012, will close its doors after more than a decade of operation. The date of closure falls on a Friday, which coincidentally aligns with the superstitious date of Friday the 13th. These events have preceded the Tesla CEO’s accusation of a Brazil Judge for misguided legal maneuver by issuing him a subpoena.
Meanwhile, the Meme token price has recovered post the announcement with the bulls managing to seize market control. At press time, DOGE price was trading at $0.1006, a 0.45% surge from the support level.
Moreover, according to an analyst, Trader Tardigrade, DOGE has reached the peak of the bearish momentum. The crypto analyst suggests that the Dogecoin price is now leaving the reversal pattern, diamond bottom which preps for a bullish breakout.
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