Lawsuit Claims Elon Musk Used “Publicity Stunts” for Dogecoin Insider Trading

Elon Musk, the CEO of Tesla, has been accused of insider trading against his followers by alleged meme coin investors in a court filing against the tech entrepreneur. This follows a $258 billion class action lawsuit filed by the same group in June 2022, accusing Musk of causing hundreds of billions in losses for Dogecoin holders.

According to an amended filing in a Manhattan federal court on May 31, Musk engaged in “a deliberate course of carnival barking market manipulation” through a “publicity circus” intended to pump Dogecoin’s price. The stunts included his public appearances and social media activity hyping up Dogecoin dating back to April 2019. These stunts boosted Dogecoin’s price by 36,000% to $0.70+ by May 2021, but today, DOGE trades 90% down from that high.

“Musk’s pretense that promotion of Dogecoin was just well-meaning fun—not meant to be taken seriously—is not credible,” read the filing, labeling the tycoon an “apex predator,” and his millions of Twitter followers as prey.

The lawsuit notes that numerous studies have already demonstrated the effect of Elon Musk’s tweets on the price of Dogecoin. Musk’s announcements that he would begin accepting Dogecoin at SpaceX in 2021 and his visit to Twitter HQ after taking over the company last year have contributed to DOGE’s fluctuating price. Musk also recently changed Twitter’s blue bird logo to a picture of the Doge meme’s Shiba Inu for three days, helping pump the coin’s price by 30%.

The filing added that Musk and Tesla traded profitably around the billionaire’s “intended moves,” citing blockchain records as evidence. Specifically, the lawsuit claims to have tracked down a wallet address—DH5ya—that allegedly belonged to Musk and became the largest single holder of Dogecoin by February 2021. That wallet then sold millions of dollars worth of Dogecoin at multiple times throughout April 2021.

A key part of the lawsuit is the presupposition that Dogecoin is an unregistered security under existing standards from the U.S. Securities and Exchange Commission. Musk was founded by Dogecoin creators Billy Markus and Jackson Palmer back in 2013, but they have remained uninvolved in the development of the project for years.

When the original lawsuit was filed last year, Musk’s lawyers said the lawsuit was fanciful. “There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion.”

This news was first seen here: Elon Musk Sued for Insider Trading With Dogecoin Using “Publicity Stunts” on 2023-06-02 19:33:31

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J-S Tremblay
About the author - J-S Tremblay

I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...

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