In a Manhattan federal court, investors in Dogecoin have accused billionaire entrepreneur Elon Musk of insider trading, claiming that he used various tactics to profit at their expense. The allegations state that Musk manipulated the cryptocurrency’s price through social media posts, collaborations with online influencers, and orchestrated publicity stunts. These tactics allegedly allowed Musk, or his companies such as Tesla, to trade profitably using Dogecoin wallets under their control.
One notable incident mentioned in the lawsuit is Musk’s appearance on NBC’s “Saturday Night Live” in 2021. Investors claim that Musk deliberately undertook publicity stunts to influence Dogecoin’s price and subsequently profited from it. For instance, after replacing Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo, Dogecoin’s price surged by 30%, leading to Musk selling approximately $124 million worth of the cryptocurrency in April.
The lawsuit also alleges that Musk’s acquisition of Twitter in October last year played a role in his alleged market manipulation activities. Investors contend that Musk’s deliberate course of action involving what they described as “carnival barking, market manipulation, and insider trading” defrauded them and promoted his personal brand and companies.
Alex Spiro, a lawyer representing Musk, declined to comment on the matter. Tesla’s legal counsel also did not respond to requests for comment, while the investors’ lawyer has yet to issue a statement.
According to Forbes magazine, Elon Musk, currently ranked as the world’s second-richest person, is accused of intentionally driving up Dogecoin’s price by over 36,000% in two years before allowing it to crash, resulting in significant losses for the investors.
This lawsuit began in June of last year, and Musk and Tesla previously sought the dismissal of the second amended complaint, dismissing it as a “fanciful work of fiction.” However, in a recent order on May 26, US District Judge Alvin Hellerstein indicated that he would likely allow a proposed third amended complaint, stating that the defendants would not likely be prejudiced.
In a separate development, the Pentagon announced its decision to purchase Starlink satellite communications terminals and services from Elon Musk’s SpaceX. The Defense Department revealed that these services would be utilized by the Ukrainian military. This procurement indicates an expansion of the Pentagon’s relationship with Musk’s SpaceX, known for its ambitious projects in space exploration and satellite communications.
As the legal battle between Elon Musk and the Dogecoin investors continues, the outcome of the lawsuit and the subsequent impact on Musk’s reputation and financial standing remain uncertain.
