Yahoo! Finance – Tesla Inc. CEO Elon Musk, the richest man in the world with a net worth of over $239 billion according to the Forbes Real-Time Billionaires List, has long been bullish on Dogecoin and has tweeted about his interest in the meme coin, driving its value significantly over the years.
Dogecoin (DOGE) is frequently touted as the original meme coin, as it jumped more than 70% in value within 72 hours of launch. Since then, Musk has tweeted positively about the meme coin, causing DOGE’s value to rise by more than 800% during the crypto bull run in 2021. At its peak, Dogecoin was considered to be the fifth most valuable cryptocurrency in the world, with a market value of more than $80 billion.
Insider Trading Lawsuit
Like most cryptocurrencies, Dogecoin had a devastating crash during the 2022 crypto winter. Investors proposing a class action lawsuit accused Musk of engaging in insider trading and manipulating the cryptocurrency Dogecoin, resulting in substantial financial losses amounting to billions.
According to a filing in Manhattan federal court in June, investors claim that Musk used various means such as Twitter posts, payments to online influencers, his 2021 appearance on NBC’s “Saturday Night Live,” and other attention-grabbing tactics to trade Dogecoin for his own gain at their expense. The transactions were allegedly conducted through multiple Dogecoin wallets controlled either by Musk personally or by Tesla.
The investors highlighted a specific incident involving Musk’s sale of approximately $124 million worth of Dogecoin in April. The sale occurred after he replaced Twitter’s iconic blue bird logo with Dogecoin’s Shiba Inu dog logo, which led to a 30% surge in the value of Dogecoin.
The filing stated that through a calculated series of insider trading, carnivallike publicity and market manipulation, Musk deceived investors while simultaneously promoting himself and his companies.
Investors have leveled accusations against Musk, asserting that he intentionally inflated Dogecoin’s price by 36,000% over a span of two years, only to allow it to plummet. The latest allegations have been included in a proposed third amended complaint, which is part of an ongoing lawsuit that commenced in June of the previous year.
Battle Ensues
In a submission presented to the federal court in Manhattan, the lawyers representing the Dogecoin investors urged the judge to dismiss Musk’s legal team, citing a consistent pattern of “derogatory and oppressive misconduct” displayed throughout the course of the case.
The plaintiffs emphasized that trials should be handled and defended by impartial attorneys, not people who merely agree without question. They pointed out that Tesla is a publicly traded company, and its CEO should not be allowed to unilaterally align its legal defense with his personal interests. “Trials should be litigated and defended by attorneys, not by yes-men,” the petition stated.
The plaintiffs cited a letter, which came to light through a report by The New York Post on June 15, as evidence of the defendant’s employment of “dirty tactics.”
Musk’s Response
Musk has vehemently denied these allegations and has tried to get the court to dismiss the lawsuit. In March, both Musk and Tesla attempted to have the second amended complaint dismissed, calling it a “fanciful work of fiction.” On May 26, they argued against another amendment, claiming it was unwarranted.
Musk’s attorney Spiro requested the retraction of the amended complaint.
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