Elon Musk and Tesla Avoid $258 Billion Dogecoin Lawsuit as Court Dismisses Case

YEREVAN (CoinChapter.com) — Elon Musk and Tesla have avoided a $258 billion lawsuit accusing them of manipulating Dogecoin's price

A U.S. District Court has dismissed a $258 billion lawsuit against Elon Musk and Tesla, filed by a group of Dogecoin investors, over allegations of manipulating the meme coin’s price, according to a report by CoinChapter.

The lawsuit, filed in June 2022, accused Musk and his electric car company of engaging in a seven-year scheme to inflate and manipulate Dogecoin’s price by over 36,000%, and then allowing it to crash.

The investors claimed that Musk, being the world’s richest man, used his status to operate a Dogecoin “pyramid scheme.”

However, U.S. District Judge Alvin Hellerstein ruled on Aug. 29 that Musk's tweets about Dogecoin were “aspirational and puffery, not factual,” and that “no reasonable investor” could rely on Musk's tweets for making investment decisions.

The court noted that Musk's statements were often exaggerated or made in jest, and that he frequently engaged in hyperbole on social media.

“The Court finds that statements regarding future value of an asset, whether stock or cryptocurrency, are inherently forward-looking and thus non-actionable,” the ruling stated.

The investors had argued that Musk's tweets, such as his 2021 tweet that “SpaceX is putting a literal Dogecoin on the moon—paid integration,” were clear attempts to manipulate the meme coin’s price.

But Judge Hellerstein noted that the tweet in question was part of a broader discussion about lunar missions and included a meme image of the Shiba Inu dog, which is the mascot of Dogecoin.

“The Court finds that no reasonable investor could have concluded from Musk's statement that he was making a factual representation about the future value of Dogecoin,” the ruling stated.

Musk's legal team had previously called the lawsuit a “fanciful work of fiction” and argued that the investors were trying to use the court to achieve a windfall.

The dismissal of the lawsuit will put an end to the investors' pursuit of $258 billion in damages.

The court's ruling in the case highlights the challenges in interpreting statements made by high-profile individuals on social media, and the legal standards for determining whether such statements constitute actionable fraud.

Meanwhile, Dogecoin's price showed little reaction to the dismissal of the lawsuit. It decreased by 0.79% in the last 24 hours and was trading at around $0.1001 at the time of writing.

Over the past month, Dogecoin has declined by 20%. The broader cryptocurrency market also witnessed a downturn in August, with Bitcoin and Ethereum both registering losses.

The lack of market movement in response to the lawsuit dismissal suggests that the outcome did not come as a surprise to investors.

Dogecoin's price has been more closely linked to broader market trends and developments rather than any direct consequence of the lawsuit.

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