A lawsuit accusing Elon Musk, Tesla CEO and owner of X (formerly Twitter), of manipulating the cryptocurrency dogecoin has been officially closed. Investors who had alleged Musk engaged in fraud and insider trading involving dogecoin have withdrawn their appeal after the case’s initial dismissal on August 29. This decision concludes a two-year legal battle that centered around Musk’s influence on the cryptocurrency market through his tweets and public statements.
Details of the Initial Lawsuit
Investors originally filed the lawsuit claiming that Musk used his social media influence and high-profile appearances to manipulate the value of dogecoin. They argued that Musk’s tweets, including references to dogecoin as the “future currency of Earth,” were strategic moves to drive up the currency’s value, which, according to the plaintiffs, resulted in significant financial losses. The investors initially sought $258 billion in damages, a staggering amount that underscored the scale of their allegations.
August 29 Dismissal and Appeal
On August 29, Judge Alvin Hellerstein dismissed the case, ruling that Musk’s statements could not reasonably mislead investors into believing they were investment guarantees. The court also found the market manipulation and insider trading claims unconvincing, stating that they lacked clear evidence.
Despite the dismissal, the investors decided to appeal, doubling down on their claims and additionally seeking sanctions against Musk’s lawyers, accusing them of interfering with the appeal by demanding substantial legal fees. Musk’s legal team countered by filing their own motion for sanctions, labeling the case “frivolous” and alleging that the investors’ lawyers repeatedly shifted legal arguments in pursuit of a quick financial settlement.
Resolution and Dismissal Agreement
On November 15, both parties reached an agreement to drop the appeal, as well as their respective motions for sanctions. The agreement was filed in federal court in Manhattan, and its approval by Judge Hellerstein will mark the official end of the lawsuit. This resolution closes a contentious chapter that saw the investors amending their complaint multiple times in an effort to strengthen their case.
Musk’s Influence on Dogecoin and Cryptocurrency Markets
This lawsuit highlighted Musk’s powerful sway over cryptocurrency markets. His tweets and comments about dogecoin often fueled fluctuations in its value, especially during the cryptocurrency’s meteoric rise in popularity. Musk’s appearance on Saturday Night Live, where he referenced dogecoin, triggered a surge in the currency’s value, followed by a sharp decline shortly afterward. Although the lawsuit has concluded, Musk’s role as a cryptocurrency influencer, especially regarding dogecoin, remains a notable case of market impact through social media.
Musk’s Recent Appointment and Continued Influence
In addition to his role in tech and cryptocurrency, Musk’s public profile continues to expand. Earlier this week, President-elect Donald Trump appointed Musk and biotech founder Vivek Ramaswamy to head the new Department of Government Efficiency (D.O.G.E.), a playful nod to Musk’s connection to dogecoin. This appointment further cements Musk’s influence and presence in both business and government.
As this high-profile lawsuit comes to an end, it underscores the complexities of regulating cryptocurrency markets, where a single individual’s public statements can greatly impact investor behavior. The case’s conclusion also illustrates the challenges plaintiffs may face when attempting to prove securities fraud in such a volatile, evolving space.
Case Reference: Gorog et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
