By Key Points
- Dogecoin lawsuit concludes after investors withdraw their appeal.
- The judge ruled that Elon Musk’s statements were not securities fraud.
- $258 billion insider trading and manipulation claim was dismissed.
- Both parties dropped motions for sanctions, resolving all disputes.
The long-running Dogecoin lawsuit against Tesla CEO Elon Musk ended after Dogecoin investors withdrew their appeal.
The lawsuit, which sought $258 billion in damages, alleged that Musk used his influence to manipulate Dogecoin’s market price through tweets, public appearances, and even his “Saturday Night Live” monologue in 2021.
This decision to withdraw the appeal comes three months after US District Judge Alvin Hellerstein dismissed the case on August 29. In his ruling, the judge stated that Musk’s actions did not meet the legal standards for securities fraud or insider trading.
The plaintiffs claimed Musk manipulated the cryptocurrency market, driving speculative trading and creating artificial price inflation for Dogecoin. However, the court found these accusations lacked evidence.
BREAKING: Elon Musk’s Dogecoin lawsuit ends as investors withdraw appeal. pic.twitter.com/7RhgZ88ERP
— DogeDesigner (@cb_doge) November 15, 2024
What Triggered the Dogecoin Lawsuit?
The Dogecoin lawsuit hinged on Musk’s ability to influence market sentiment with his public endorsements of the meme coin. Investors argued that Musk’s tweets, such as labeling Dogecoin “the future currency of Earth” or mentioning it in SpaceX-related announcements, drove significant trading activity.
The plaintiffs further cited Musk’s hosting of Saturday Night Live in May 2021, during which he referred to Dogecoin as a “hustle.” They claimed this statement caused the cryptocurrency’s price to plummet, resulting in significant investor losses.
Despite these claims, the court dismissed the idea that Musk’s statements constituted securities fraud or insider trading. Judge Hellerstein ruled that Musk’s tweets and public remarks were non-binding opinions that didn’t violate securities laws.
“Statements of enthusiasm or vague optimism about a cryptocurrency are not actionable under current laws,” the judge explained.
Both Sides Withdraw Sanctions Motions
The conclusion of the Dogecoin lawsuit also saw both parties drop related motions for sanctions. Investors had accused Musk’s legal team of interfering with the appeal process and requesting excessive legal fees.
Conversely, Musk and Tesla filed a motion alleging that the investors’ attorneys pursued baseless claims to force a settlement. Musk’s team called the lawsuit a “shakedown,” claiming it lacked merit from the start.
By filing a stipulation in Manhattan’s federal court, both parties agreed to dismiss these motions, officially ending the legal battle.
Legal Victory for Elon Musk and Its Broader Impact
The dismissal of the Dogecoin lawsuit represents a significant legal victory for Elon Musk. It also sets a critical precedent for cryptocurrency-related lawsuits, particularly those involving high-profile individuals with large followings.
The lawsuit highlights the challenges of regulating a volatile and decentralized cryptocurrency market. While Musk’s tweets and endorsements undeniably influenced Dogecoin’s price, the court found no evidence of fraud or manipulation under current laws.
The case underscores the unique dynamics of the crypto industry, where market movements are often driven by speculation and social media buzz. It also raises questions about the balance between free speech and market regulation, particularly when influential figures are involved.
For investors, the dismissal serves as a reminder of the inherent risks in cryptocurrency markets, where volatility and external influence are the norm.
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