The investors specifically highlighted an incident in which Musk sold approximately $124 million worth of Dogecoin in April after he replaced Twitter’s blue bird logo with Dogecoin’s shiba inu dog logo, resulting in a 30% surge in Dogecoin’s value.
Tesla CEO Elon Musk is facing allegations of insider trading in a class-action lawsuit brought forward by investors. The investors claim that Musk manipulated the cryptocurrency Dogecoin, resulting in significant financial losses amounting to billions of dollars. In a filing made on Wednesday evening at a federal court in Manhattan, the investors asserted that Musk utilized Twitter posts, paid endorsements from online influencers, his appearance on NBC’s Saturday Night Live in 2021, and various other attention-grabbing tactics to trade Dogecoin profitably at their expense. They alleged that Musk or Tesla controlled several Dogecoin wallets involved in these activities.
The investors specifically highlighted an incident in which Musk sold approximately $124 million worth of Dogecoin in April after he replaced Twitter’s blue bird logo with Dogecoin’s shiba inu dog logo, resulting in a 30% surge in Dogecoin’s value. The filing claimed that Musk’s actions constituted a deliberate strategy of market manipulation, insider trading, and showmanship, which deceived investors while promoting himself and his companies.
Musk, who became the world’s wealthiest individual, also owns Twitter since his acquisition of the platform in October of the previous year. Apart from Tesla, he is involved in other ventures such as SpaceX, a manufacturer of rockets and spacecraft, as well as being an electric carmaker.
The investors have accused Musk of intentionally driving up the price of Dogecoin by over 36,000% within two years and subsequently allowing it to crash. These latest accusations were presented in a proposed third amended complaint as part of a lawsuit that originated in June of the previous year. Musk and Tesla had previously sought the dismissal of the second amended complaint in March, dismissing it as a baseless fabrication. On May 26, they argued against further amendments to the complaint, deeming them unwarranted.
In response to the proposed third amended complaint, US District Judge Alvin Hellerstein indicated that he would likely permit its inclusion, stating that it would not unduly prejudice the defendants. Furthermore, Hellerstein granted the investors’ request to remove the nonprofit Dogecoin Foundation as a defendant in the case. The foundation’s attorney, Seth Levine, expressed agreement with the dismissal, deeming it an appropriate outcome.
