Elon Musk Win Dismissal In Dogecoin Price Manipulation Allegations

A federal judge in Manhattan has permanently dismissed a lawsuit accusing Elon Musk and Tesla of manipulating the price of Dogecoin (DOGE), a popular dog-themed cryptocurrency, through Musk’s tweets and public appearances. 

The ruling, issued by the U.S. District Judge Alvin Hellerstein on Thursday night, marks the end of a legal battle that began in 2022 when investors alleged that Musk used his influence on social media, specifically on X (formerly Twitter), and a 2021 appearance on NBC's "Saturday Night Live" to artificially inflate Dogecoin's value for his personal gain.

Musk Promoted Dogecoin (DOGE)?

The plaintiffs in the case had accused Musk of leveraging his massive Twitter following and making public statements that suggested a strong personal endorsement of Dogecoin. Among the notable statements cited in the lawsuit were Musk’s tweets declaring himself as "Dogecoin's CEO," his promise to send a "literal Dogecoin in SpaceX and fly it to the moon," and his claims that "Dogecoin might become the standard for the global financial system." 

These actions, according to the plaintiffs, led to speculative trading, with Musk allegedly profiting from his holdings as prices surged and subsequently declined. However, Judge Hellerstein found that Musk’s statements were not actionable under securities law. He characterized the remarks as “aspirational and puffery” rather than concrete, factual assertions that could be proven false. 

"No reasonable investor could rely upon them," the judge noted in his ruling, suggesting that Musk’s enthusiastic promotion of Dogecoin was more about fostering community hype than engaging in deliberate price manipulation.

Musk, Tesla Wins Dismissal

In his final judgment, Hellerstein granted the defendants' motion to dismiss the Fourth Amended Complaint with prejudice, meaning the case cannot be brought back to court. He instructed the court clerk to enter judgment in favor of Musk and Tesla, terminate all pending motions, and close the case. This decision effectively ends the lawsuit, providing a clear victory for Musk and Tesla against claims of market manipulation.

This ruling underscores the challenges of proving market manipulation based on public statements, especially when those statements are perceived as exaggerated or humorous rather than factual. Musk, known for his provocative and often playful social media presence, has frequently made headlines with his tweets about cryptocurrencies, but this dismissal reinforces the notion that not all promotional or enthusiastic expressions about digital assets can be equated to actionable market manipulation.