By Nermeen Nabil TLDR:
Federal judge dismissed $258 billion Dogecoin lawsuit against Elon Musk and Tesla
Judge ruled Musk’s statements were “aspirational and puffery” not factual claims
Lawsuit claimed Musk manipulated Dogecoin prices through public statements
Plaintiffs’ attorneys plan to appeal the ruling
Dogecoin remains a top 10 cryptocurrency by market cap at $14.5 billion
A federal judge has dismissed a $258 billion class-action lawsuit against Elon Musk and Tesla over alleged manipulation of Dogecoin prices. The lawsuit, filed in June 2022, accused Musk and Tesla of running a “pyramid scheme” by promoting the cryptocurrency through public statements and social media posts.
U.S. District Judge Alvin K. Hellerstein ruled that Musk’s statements about Dogecoin were “aspirational and puffery, not factual and susceptible to being falsified.” The judge stated that “no reasonable investor could rely upon them” as the basis for investment decisions.
The lawsuit centered on various public comments made by Musk about Dogecoin between 2021 and 2023, primarily on the social media platform X (formerly Twitter). Plaintiffs argued that Musk’s statements, including claims that Dogecoin was the “future currency of Earth” and promises to send it to the moon via SpaceX, misled investors and led to significant financial losses.
SpaceX launching satellite Doge-1 to the moon next year
– Mission paid for in Doge
– 1st crypto in space
– 1st meme in space
To the mooooonnn!!https://t.co/xXfjGZVeUW
— Elon Musk (@elonmusk) May 9, 2021
Attorneys representing the plaintiffs sought $86 billion in damages, with a request for triple damages bringing the total to $258 billion. The lawsuit was amended four times since its initial filing, later adding accusations of insider trading against Tesla’s legal counsel.
In his two-page ruling, Judge Hellerstein found the plaintiffs’ arguments unclear, stating it was “not possible to understand the allegations that form the basis of plaintiffs’ conclusion of market manipulation, a ‘pump and dump’ scheme, a breach of a fiduciary duty amounting to insider trading, or the state law claims.”
Dogecoin, which began in 2013 as a lighthearted parody of cryptocurrency, has since become one of the world’s most valuable digital assets.
As of August 2024, it ranks in the top 10 cryptocurrencies by market capitalization, with a total value of $14.5 billion and a price of $0.10 per coin.
The cryptocurrency gained significant attention during Musk’s appearances on Saturday Night Live, where he mentioned Dogecoin in his opening monologue and a later skit. Musk also made headlines by declaring that SpaceX would send Dogecoin to the moon and accept it as payment for the mission.
Despite the ongoing legal battle, Musk continued to show public support for Dogecoin. In 2023, he briefly changed X’s logo to the Dogecoin mascot, a Shiba Inu dog, for three days.
Attorneys for the plaintiffs expressed disappointment with the ruling, stating that Musk’s statements amounted to “far more than puffery” and resulted in investors losing “billions of dollars.”
They announced plans to appeal the decision to the Second Circuit Court of Appeals, which has previously ruled against Musk in other cases.
As of the ruling, Dogecoin’s price remained relatively stable, with only a slight 0.1% increase in the 24 hours following the news.
The cryptocurrency has experienced a 20% decline in value over the past month, reflecting the volatile nature of the digital asset market.
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Nermeen Nabil Khear