Tesla and SpaceX CEO Elon Musk and his legal team have asked a U.S. judge to throw out a $258 billion lawsuit filed in June 2022 by investors, who claimed that he ran a pyramid scheme to promote Dogecoin ($DOGE).
Popular meme-based cryptocurrency Dogecoin ($DOGE) was initially released on December 6, 2013 as a “fun and friendly internet currency.” It was created by Billy Markus and Jackson Palmer. Dogecoin is “a decentralized, peer-to-peer digital currency” that has as its mascot “Doge,” a Shiba Inu (a Japanese breed of dog).
Since then, its popularity has substantially increased, especially in the past couple of years, primarily thanks to support from billionaires Elon Musk and Mark Cuban (the majority owner of the professional basketball team Dallas Mavericks, as well as one of the “sharks” on the highly popular reality show “Shark Tank,” to the point that it is currently the eight most valuable cryptocurrency, with a market cap of roughly $10.85 billion. In fact, in 2019, Musk said that $DOGE might be his favorite cryptocurrency.
According to a report by CNBC, last Friday (March 31), in a filing in Manhattan federal court, Musk’s attorneys asserted that the claims are entirely unfounded and unsupported by evidence. They maintain that Musk’s tweets backing Dogecoin were nothing more than lighthearted and often goofy remarks, far from being investment guidance. Furthermore, they argue that his comments were too ambiguous to justify any fraud allegations.
The investors argue that Musk’s tweets and statements fueled a massive surge in Dogecoin’s price before it plummeted, causing them to suffer considerable losses. They point to Musk’s guest appearance on “Saturday Night Live” in May 2021, where he dubbed Dogecoin “a hustle,” as proof of his deceptive conduct. The lawsuit accuses Musk of exploiting his celebrity status and considerable influence to manipulate Dogecoin’s value.
In an attempt to persuade the judge to drop the multibillion-dollar lawsuit, Musk’s legal team characterized his Dogecoin-related tweets as “harmless and frequently absurd.” They argued that there’s nothing illegal about expressing support for a legitimate cryptocurrency that still boasts a market cap of nearly $10 billion. Furthermore, his lawyers refuted the investors’ assertion that Dogecoin was a security.
Investors in the lawsuit claim that Musk’s statements prompted them to pour money into Dogecoin, only to face significant financial setbacks when the cryptocurrency’s value plummeted. They have used Musk’s tweets and comments as evidence of his fraudulent behavior, alleging that he operated a pyramid scheme to boost Dogecoin.
Musk’s attorneys described the lawsuit as a “fantastical work of fiction” and implored the judge to dismiss it. Despite this, the investors, represented by Evan Spencer, remain confident in the success of their case.