Emily Walker
A legal dispute accusing Elon Musk of manipulating Dogecoin’s price is nearing its end as investors have chosen to retract their appeal following a dismissal given on August 29.
This case involved allegations that Musk, a billionaire and CEO of Tesla, committed fraud and insider trading concerning the popular dog-themed cryptocurrency.
Parties Seek Dismissal of Dogecoin Lawsuit
In recent court documents, the investors withdrew their demand for sanctions against Musk’s legal representation, arguing that the lawyers interfered with the appeal process by insisting on high legal fees. Meanwhile, Musk and Tesla have also withdrawn their request to sanction the investors’ attorney, labeling the case as “frivolous” and suggesting that it was aimed at squeezing a quick settlement.
A stipulation to dismiss the appeal and motions from both sides were submitted in a federal court in Manhattan on Thursday evening, now awaiting the approval of US District Judge Alvin Hellerstein. As of Friday, neither Musk’s nor the investors’ attorneys had commented on this situation.
Court Rejects Securities Fraud Claims
The investors accused Musk of using social media platforms, including X (formerly Twitter) and an appearance on NBC’s “Saturday Night Live,” to manipulate the price of Dogecoin by strategically timing his trades with public statements.
However, on August 29, Judge Hellerstein concluded that reasonable investors could not substantiate claims of securities fraud based solely on Musk’s social media activity, which included suggestions that Dogecoin could become the “currency of the Earth” and that it could even reach the moon via SpaceX.
The judge noted confusion over the allegations regarding market manipulation and insider trading, indicating the claims were neither clear nor legally sound. Initially, the investors sought an unprecedented $258 billion in damages and revised their complaint multiple times over two years.
Currently, Dogecoin, valued at $0.356, boasts a market cap of $52 billion. It stands out among the top ten digital currencies, having gained 83% and nearly 190% over the past seven and thirty days, respectively. This increase was fueled by the announcement of Musk’s leadership role in the new Trump Department of Government Efficiency, or DOGE, which investors interpreted as a positive sign for the meme-based cryptocurrency.
Despite these recent gains, Dogecoin remains 50% lower than its all-time peak of $0.731 achieved during the 2021 market surge, with high hopes for further increases as the year progresses.
Featured image from BBC, chart from TradingView.com