- Elon Musk and Tesla won the dismissal of a federal lawsuit accusing them of defrauding investors by hyping the cryptocurrency dogecoin and conducting insider trading.
- The judge ruled that Musk’s tweets about dogecoin being the future currency of Earth and usable to buy Teslas were “aspirational and puffery,” not factual statements susceptible to being falsified.
- The judge dismissed the lawsuit with prejudice, meaning it cannot be brought again, after investors originally sought $258 billion in damages.
Elon Musk and Tesla have prevailed in a high-profile lawsuit accusing them of manipulating the cryptocurrency dogecoin. A federal judge dismissed the investor lawsuit, dealing a major blow to the plaintiffs.
Background of the Lawsuit
In 2022, investors filed a lawsuit against Elon Musk and Tesla alleging fraud and market manipulation related to dogecoin cryptocurrency. The plaintiffs claimed that Musk used his public persona and Tesla’s resources to hype dogecoin and conduct insider trading in it, causing billions in losses.
Specifically, the investors accused Musk of the following:
- Tweeting that dogecoin was “the future currency of Earth” and could be used to buy Tesla vehicles
- Promoting dogecoin during a 2021 Saturday Night Live appearance
- Replacing the Twitter logo with the dogecoin Shiba Inu dog, causing a price spike
- Controlling several dogecoin wallets used for suspicious trading
- Deliberately inflating the price 36,000% in two years before letting it crash
Judge Dismisses Lawsuit With Prejudice
On Thursday night, U.S. District Judge Alvin Hellerstein dismissed the lawsuit with prejudice, meaning it cannot be brought again.
In his decision, Judge Hellerstein stated that Musk’s promotional tweets were too aspirational and exaggerated to be considered factual claims that investors could rely on. He also said the plaintiffs failed to sufficiently articulate the market manipulation and insider trading allegations.
Originally seeking $258 billion in damages, the investors had amended their complaint four times over two years to no avail.
Reaction to the Lawsuit’s Dismissal
Musk’s lawyer Alex Spiro responded positively, stating “It’s a very good day for dogecoin.”
In motions to dismiss, Musk’s legal team had argued his tweets were innocuous and that there was no evidence he actually traded dogecoin improperly.
The investors’ lawyers have not commented on the dismissal. The ruling deals a major setback to their efforts after years of litigation.
Despite hype from Musk, dogecoin’s price has cratered since its 2021 peak. The dismissal leaves its future even more uncertain.
