Elon Musk’s legal team has filed a motion to dismiss a $258 billion class-action lawsuit brought against him by Dogecoin investors. The lawsuit accuses Musk of participating in a racketeering scheme to pump the price of the meme-inspired cryptocurrency.
— Whale Coin Talk (@WhaleCoinTalk) April 2, 2023
Dismissal of Lawsuit
In a court filing, Musk’s lawyers dismissed the allegations as a fanciful work of fiction. The lawyers explained that Musk’s tweets about Dogecoin, including his comments that “no highs, no lows, only Doge” and “Dogecoin Rulz”, were too vague to justify a fraud allegation. They described Musk’s tweets as “innocuous and often silly, ” saying there is nothing unlawful about expressing support for a legitimate cryptocurrency with a market cap of nearly $10 billion.
Musk’s legal team argued that the tweets were not part of any fraudulent scheme and that they were protected under the First Amendment’s right to free speech. The lawyers also stated that Musk’s tweets did not constitute investment advice and that the plaintiffs failed to prove any actual damages caused by Musk’s tweets.
Allegations Against Musk
The lawsuit accuses Musk of falsely claiming that Dogecoin is a legitimate investment when it has zero value. He also allegedly inflated the coin’s price by over 36,000% before letting it fall back to earth. The investors claim that Musk’s tweets were designed to manipulate the market and profit from the cryptocurrency’s price surge.
The lawsuit also cites Musk’s appearance on Saturday Night Live, during which he called Dogecoin “a hustle”. The investors claim that Musk portrayed himself as a financial pundit and gave false investment advice, which caused them to suffer losses.
Confidence of Plaintiff’s Lawyers
Lawyers representing the plaintiffs are “more confident than ever that our case will be successful,” according to reports. The case is being heard in a federal court in Manhattan, and the plaintiffs are seeking $258 billion in damages.
Future of Dogecoin
Despite the controversy, Dogecoin holds a nearly $10 billion market cap. Musk’s tweets have been a major driver behind the cryptocurrency’s price action. He has previously indicated that he is working with developers to make the world’s-largest joke coin a bitcoin rival.
Dogecoin has also gained some uses, with Musk announcing in January 2022 that his electric vehicle maker Tesla would accept Dogecoin as payment for the company’s merchandise. Later in May of that year, he announced that DOGE payments would also be accepted by his space exploration company SpaceX.