World's richest man Elon Musk sued over Dogecoin price manipulation
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A day after being crowned with the title of the world’s richest man, little did Elon Musk know that there was a class action lawsuit brewing against him.
The Tesla CEO has been accused of potential market manipulation of the cryptocurrency Dogecoin in a proposed class action lawsuit filed on Wednesday.
Investors of the cryptocurrency say that Twitter CEO Elon Musk deliberately inflated the price of Dogecoin to their detriment, which cost them billions of dollars.
Musk did publicity stunts to trade profitably
The lawsuit reads: “This is a securities class action arising from an undisguised course of cryptocurrency market manipulation by Defendant Elon Musk, from which Musk and his company, Tesla, Inc., wrongfully profited to the tune of billions of dollars on the backs of millions of working Americans.”
The investors sued Musk in the third amendment to the lawsuit filed in Manhattan federal court. Court filing reveals Musk's 'publicity stunts' like using his Twitter posts, paying online influencers, and his 2021 appearance on NBC’s Saturday Night Live to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls, reported The Guardian.
The filing said that a “deliberate course of carnival barking, market manipulation, and insider trading” enabled Musk to defraud investors and promote himself and his companies.
After the filing of the second amendment in March, Musk and Tesla sought its dismissal because it’s a “fanciful work of fiction.”
Musk sold around $124 million of Dogecoin in April after the cryptocurrency’s price jumped 30 percent when he replaced Twitter’s blue bird logo with Dogecoin’s shiba inu dog logo, the investors allege.
Musk’s association with Dogecoin goes way back
This isn’t the first time that Musk has found himself entangled in a legal battle with Dogecoin investors. He was first sued in June 2022 by investors of Dogecoin alleging that he was running a pyramid scheme to support the cryptocurrency. The investors sued Musk for $258 billion.
The complaint filed by the investors said, "Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement."
In an interview with the Full Send Podcast in August last year, Musk claimed that he likes Dogecoin because the cryptocurrency does not take itself too seriously. Instead, it has "memes and dogs" and "a sense of humor."
In what can be called a promotion of Dogecoin, Musk suggested in 2022, before he acquired Twitter, that the microblogging website should allow users to pay for Twitter Blue via Dogecoin. He even said in a January 2022 tweet that if McDonalds' accepts payments via Dogecoin, then he would start eating at the fast-food joint. He also announced, via a tweet of course, that he would accept payments in the ‘meme coin’ for his Tesla merchandise, which then saw an uptick in the crypto’s value.
Musk did something similar with Bitcoin in 2021 when his company Tesla bought $1.5 billion worth of the cryptocurrency and heavily promoted it. But then he ditched Bitcoin and started supporting Dogecoin instead.
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