Elon Musk and Tesla Inc. have successfully won the dismissal of a $258 billion lawsuit alleging they artificially inflated the price of the cryptocurrency Dogecoin, creating what was described as a “pyramid scheme.”
The lawsuit, brought by investors who claimed to have lost substantial amounts of money, accused Musk of using his vast Twitter following to promote Dogecoin, driving up its value with posts such as “One word: Doge.” According to the 2022 complaint, Musk further boosted the cryptocurrency’s price by announcing that Tesla would accept Dogecoin as payment for merchandise.
However, on Thursday, a federal judge in New York dismissed the claims, ruling that Musk’s statements were “aspirational” rather than “factual and susceptible to being falsified.” The judge noted that no reasonable investor could have relied on Musk’s comments as a basis for financial decisions.
The investors also accused Musk and Tesla of engaging in a “pump and dump” scheme involving Dogecoin, but US District Judge Alvin Hellerstein found these allegations incomprehensible, further weakening the case.
Evan Spencer, the plaintiffs’ attorney, expressed disappointment with the ruling, stating that his clients intend to appeal. “Musk’s statements and publications were far more than puffery, and millions of investors lost billions of dollars as a result,” Spencer said.
Dogecoin, originally created as a “memecoin” based on an internet joke, features the image of a Shiba Inu dog as its logo.
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