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Court dismisses $258B DOGE manipulation case against Elon Musk

Court dismisses $258B DOGE manipulation case against Elon Musk

GrafaGrafa2024/08/30 09:45
By:Liezl Gambe

A U.S. court has dismissed a $258 billion class action lawsuit against Elon Musk and his companies, SpaceX and Tesla, over allegations of manipulating Dogecoin’s price (CRYPTO:DOGE).

Nearly two years after the lawsuit was filed, Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York ruled to drop the case, which sought $258 billion in damages.

The plaintiffs accused Musk of using his influence as the world's richest man to inflate Dogecoin's price by over “36,000%” and then allowing it to crash, resulting in investor losses.

The lawsuit claimed Musk's actions amounted to a “Dogecoin Pyramid Scheme,” suggesting he promoted the cryptocurrency for personal gain through the volatility he allegedly caused.

The case also referenced Musk’s 2021 appearance on "Saturday Night Live," where he called Dogecoin “a hustle” in a skit, which led to a 25% drop in the token's price shortly after reaching an all-time high of $0.73.

In his August 29 decision, Judge Hellerstein stated that Musk's comments about Dogecoin were “aspirational and puffery, not factual,” meaning they were not statements upon which a reasonable investor could base investment decisions.

The judge also determined that there was insufficient evidence to support allegations of a “pump and dump” scheme, market manipulation, or insider trading, noting that the claims were too vague to be substantiated.

Musk’s legal team argued that his social media endorsements of Dogecoin were too imprecise to be considered fraudulent or manipulative.

The price of Dogecoin did not significantly change following the lawsuit's dismissal, remaining 86.4% below its all-time high.

Over time, Musk has distanced himself from the cryptocurrency industry; for instance, Tesla, his electric vehicle company, initially accepted Bitcoin as a payment method but reversed this decision shortly after Musk's SNL appearance.

Despite this reversal, Tesla has continued to hold onto its Bitcoin assets (CRYPTO:BTC), as confirmed in its Q1 2024 earnings report.

At the time of reporting, Dogecoin price was $0.101.

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