A federal court in Manhattan has dismissed a lawsuit accusing Elon Musk and Tesla of defrauding investors over the cryptocurrency Dogecoin.
Allegations Against Musk and Tesla
The lawsuit, filed in June 2023, claimed that Musk and Tesla manipulated the Dogecoin market, inflating its value by over 36,000%. The plaintiffs argued that Musk's social media promotion of Dogecoin and his endorsement of it for Tesla merchandise caused the cryptocurrency's price to spike dramatically. They accused Musk of leveraging his influence to drive up the cryptocurrency's value and then profiting from its decline. The complaint alleged that Musk’s public statements, including a notable tweet saying 'One word: Doge,' and the announcement that Tesla would accept Dogecoin for merchandise, were designed to manipulate the market. The investors sought $258 billion in damages, alleging insider trading and market manipulation.
Court's Ruling
Judge Hellerstein’s ruling decisively rejected the plaintiffs' claims. The court determined that Musk’s comments about Dogecoin were not fraudulent but were rather aspirational and puffery. According to the ruling, statements about Dogecoin being the 'future currency of Earth' or being used to buy Teslas were deemed as promotional rather than actionable fraud. The judge noted that there was no substantial evidence to support claims that Musk or Tesla were involved in unfairly manipulating the market or trading Dogecoin to their advantage.
Reactions
Elon Musk and Tesla have welcomed the court’s decision, viewing it as a validation of their actions. Musk has previously stated that his comments about Dogecoin were humorous and did not intend to mislead investors. At the time of writing, Dogecoin is trading at $0.1009 with almost no change over the last 24 hours.
In conclusion, the court has dismissed the lawsuit, ruling that Musk’s statements about Dogecoin were promotional and not fraudulent.
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