In a recent court decision, US District Judge Alvin Hellerstein criticized Elon Musk’s Dogecoin-related tweets, describing them as “enthusiastic and exaggerated, unrealistic, and open to forgery.” However, both Elon Musk and Tesla successfully dismissed a federal lawsuit that accused them of manipulating Dogecoin’s market value.
Background of the Dogecoin Case
This lawsuit, filed in June 2022, claimed that Musk’s actions caused significant financial losses to investors. On August 29, Judge Hellerstein in Manhattan ruled on the case, which focused on Musk’s alleged manipulation of Dogecoin’s value through his tweets, his appearance on “Saturday Night Live,” and other promotional activities.
Allegations Against Musk
According to the plaintiffs, Musk manipulated Dogecoin’s market by selling it just before a rise in value. They argued that Musk artificially boosted Dogecoin’s price by actions like changing Twitter’s logo to the Shiba Inu dog, Dogecoin’s symbol. It allows him to profit from insider trading. They also claimed that Musk misled investors with his public statements about Dogecoin, labeling his actions as mere “bragging” without concrete facts.
Musk’s Response to the Lawsuit
In response, Elon Musk dismissed the lawsuit as a “fictitious work of fiction.” The plaintiffs had demanded $258 billion in compensation. It holds Musk accountable for the decline in Dogecoin’s value due to his influence. On March 31, 2023, Musk and his legal team filed a motion to dismiss the lawsuit, calling the allegations baseless and the compensation claim “fanciful.”
Judge’s Decision: Exaggeration, Not Fraud
In his ruling, Judge Hellerstein noted that the defendants misinterpreted some of Musk’s tweets about Dogecoin. For example, Musk’s claims of being the official CEO of Dogecoin and plans to send Dogecoin to the Moon via a SpaceX vehicle were cited as exaggerated and untrue.
The judge further ruled that no reasonable investor could base a securities fraud claim on Musk’s tweets. He found it “impossible” to see how these tweets could convince investors of market manipulation or insider trading. Consequently, the court dismissed the fraud claims.
Current Status of Dogecoin
As of the latest updates, Dogecoin continues to trade at $0.10, reflecting a 0.5% drop during the day.