A federal court in Manhattan has dismissed a lawsuit accusing Elon Musk and Tesla of defrauding investors over the cryptocurrency Dogecoin. The lawsuit, filed in June 2023, claimed that Musk and Tesla manipulated the Dogecoin market by inflating its value over 36,000%.
Lawsuit Against Musk and Tesla
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.
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. Statements about Dogecoin being the 'future currency of Earth' or being used to buy Teslas were deemed promotional rather than actionable fraud.
Reactions from Both Sides
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. As of the time of writing, Dogecoin is trading at $0.1009 with almost no change over the last 24 hours.
The decision of the federal court in Manhattan represents an important precedent in cases related to market manipulation in the cryptocurrency sector. It affirms that public statements, even from influential individuals, are not always considered fraudulent.
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