Dogefather Elon Musk and his electric vehicle company, Tesla, have successfully dodged a class action lawsuit that accused them of market manipulation through public praise of leading meme coin Dogecoin (DOGE), causing $258 billion in financial losses.
Judge Alvin Hellerstein of the United States District Court for the Southern District of New York dismissed the lawsuit in an Aug. 29 ruling.
Disgruntled Investors’ Claims Fail To Stick
First lodged in June 2022 and amended four times, the lawsuit alleged that Musk’s statements, mostly made via posts on the X (formerly known as Twitter) social media platform, including his claims about agreeing to become the CEO of Dogecoin and his proposal to put a single DOGE in a SpaceX vehicle and literally take it to the moon, were misleading.
Musk’s declarations that DOGE was the future currency of Earth were also highlighted in the lawsuit.
The investors accused Musk of propping up the Dogecoin price “more than 36,000% over two years and then letting it crash.” They further alleged that the centibillionaire had “used his pedestal as the World’s richest man to operate and manipulate the Dogecoin Pyramid Scheme.”
We all recall the time last year when Dogecoin rose over 25% after X’s blue bird logo was replaced with the Dogecoin mascot. The investors also cited this incident in their suit.
On March 31, 2023, Musk asked a New York federal court to toss out the lawsuit. The legal team for the eccentric CEO and Tesla billed the allegations and the demand for $258 billion in damages as a “fanciful work of fiction.”
Judge Hellerstein’s Ruling
District Judge Alvin K. Hellerstein dismissed the lawsuit without prejudice on Thursday, meaning it cannot be brought back to court since it has been permanently dismissed.
In the two-page ruling, the judge said “it is not possible to understand” the claims that form the aggrieved investors’ conclusion of market manipulation, Musk and Tesla’s alleged “pump and dump” scheme, and a fiduciary duty amounting to insider trading.
“These statements are aspiration and puffery, not factual and susceptible to being falsified,” Judge Hellerstein postulated, adding that “no reasonable investor” could rely on Musk’s public statements for sound investment advice.
What The Ruling Means For Dogecoin’s Future
Judge Hellerstein’s ruling marks a major win for the Dogecoin community as Musk is not barred from endorsing DOGE or accepting the canine-themed crypto as payment at his multi-billion-dollar companies.
AI Said: Elon Musk can still accept Dogecoin as payment at Tesla and promote it. The court’s decision to dismiss the lawsuit does not prevent Musk or Tesla from continuing to use or promote Dogecoin. The dismissal was based on the idea that Musk’s statements about Dogecoin were…
— Doge Whisperer (@TDogewhisperer) August 30, 2024
Moreover, with Musk’s X expected to roll out its payment service soon, the DOGEArmy hopes for integration that would boost the crypto’s use cases and adoption.
Meanwhile, the price of Dogecoin remained largely unmoved following news of the dismissal, surging by a paltry 1.2% over the past 24 hours. At press time, DOGE is trading for $0.1017 and has lost 19.3% of its value in the last month, as shown by data from CoinGecko.
