Elon Musk wins Dogecoin lawsuit: Judge dismisses 'pyramid scheme' claims
Elon Musk and his electric vehicle company, Tesla, have successfully cleared a lawsuit that accused them of artificially inflating the price of Dogecoin. The suit alleged that their actions turned the meme cryptocurrency into a $258 billion pyramid scheme. Investors who lost significant amounts after investing in Dogecoin, due to Musk's tweets, blamed him for "pumping up" its price.
Musk's Dogecoin tweets sparked investor interest
Musk's comments like "One word: Doge" sparked a frenzy among his Twitter (now X) followers. He also reportedly boosted Dogecoin's value by announcing that Tesla would accept it for merchandise. Investors, who had poured tens of thousands of dollars into Dogecoin after Musk's frequent tweets, eventually lost their investments and accused him of misleading social media followers.
Judge rules Musk's statements as 'aspirational'
US District Judge Alvin Hellerstein dismissed the lawsuit on August 29, ruling that Musk's social media posts were "aspirational" rather than "factual and susceptible to being falsified." The judge stated that "no reasonable investor could rely upon them." This decision came in response to the case Johnson v. Musk, 22-cv-05037, filed in the US District Court for the Southern District of New York (Manhattan) in 2022.
'Pump and dump' allegations also dismissed
The lawsuit also accused Musk and Tesla of engaging in a "pump and dump" scheme with Dogecoin. However, Judge Hellerstein stated that it was "not possible to understand" these allegations. Despite the dismissal, the plaintiffs' attorney Evan Spencer expressed disappointment and plans to appeal. He argued that "Musk's statements and publications were far more than puffery, and a class of millions lost billions of dollars as a result."
