FameEX Hot Topics | Elon Musk and Tesla Prevail in Dogecoin Manipulation Lawsuit

A U.S. District Court Judge has dismissed a lawsuit against Elon Musk and Tesla, which accused them of manipulating Dogecoin’s price, resulting in alleged damages of $258 billion. The judge stated that “no reasonable investor” would rely on Musk’s tweets about Dogecoin for making investment decisions. This ruling marks a significant victory for Musk and his electric vehicle company.

The lawsuit was dismissed on August 29 by U.S. District Judge Alvin Hellerstein, who presides over the Southern District of New York. Judge Hellerstein pointed out that the case involved "material misrepresentations" of Musk’s tweets regarding Dogecoin. These tweets included Musk’s joking claims about becoming the CEO of Dogecoin and his suggestion that a “literal” Dogecoin could be sent to the moon aboard a SpaceX vehicle.

Judge Hellerstein emphasized that “no reasonable investor” would take Musk’s tweets as reliable investment advice. The lawsuit, filed in June 2022, accused Musk of inflating Dogecoin’s price by over 36,000% in two years before allowing it to crash. The investors also alleged that Musk used his status as the world’s richest man to manipulate what they described as the “Dogecoin Pyramid Scheme.”

In response, Musk’s legal team requested the lawsuit’s dismissal on March 31, arguing that the claims and the demand for $258 billion in damages were a “fanciful work of fiction” presented in Manhattan’s federal court. The court ultimately agreed, leading to the lawsuit’s dismissal.

Despite the legal victory, the market reaction was minimal. Dogecoin’s price remained relatively stable, with only a 0.1% gain in the last 24 hours. As of the time of publication, Dogecoin was trading at $0.10, though it had experienced a 20% decline over the past month, according to CoinGecko data.

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