Elon Musk and his electric vehicle manufacturer Tesla have won the dismissal of a federal lawsuit alleging that they defrauded Dogecoin (DOGE) investors.
The lawsuit in question accused Musk and Tesla of defrauding investors by promoting the Dogecoin memecoin, report Reuters.
The lawsuit also alleged that the defendants engaged in insider trading and caused billions of dollars of losses and sought $258 billion in damages.
Elon Musk’s Dogecoin promotion
Investors alleged that Musk leveraged his X profile and a 2021 appearance on NBC’s “Saturday Night Live” to promote Dogecoin. Elon Musk and Tesla are also accused of having profitably traded the memecoin through several wallets they controlled.
Musk was accused of deliberately causing a Dogecoin price increase off over 36,000% over two years and then allowing it to crash. He and his electric vehicle manufacturing company allegedly both timed trades in accordance with Musk’s public statements about the memecoin.
One occasion specifically cited was when, in April 2023, Musk replaced Twitter’s blue bird logo with Dogecoin’s symbol. This caused the memecoin to surge by 30%.
Still, U.S. District Judge Alvin Hellerstein claimed that Musk’s Dogecoin-related claims and statements were “aspirational and puffery, not factual and susceptible to being falsified.”
The judge further claimed that no reasonable investor could rely on those statements to pursue a securities fraud claim. This resonates with Musk’s lawyers’ comments, suggesting there was nothing wrong with their client’s “innocuous and often silly tweets.”
The lawsuit was also dismissed with prejudice — meaning that it cannot be brought up in court again. Hellerstein claimed that it was “not possible to understand” the allegations of market manipulation and insider trading. Musk’s lawyer Alex Spiro said:
“It’s a very good day for dogecoin.”
Musk’s lawyers further claimed that there is no proof that Musk owned two wallets for conducting relevant trading activity. There is allegedly no proof that he or his company ever sold Dogecoin either.
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