Lawyers representing millions of disgruntled investors told Decrypt they plan to contest this ruling in the Second Circuit Court of Appeals.
On Thursday, a federal judge dismissed a class-action lawsuit accusing Tesla and its CEO Elon Musk of manipulating the market by publicly praising Dogecoin.
Plaintiffs claim that investors who suffered losses in recent years due to Musk's comments on social media are seeking $86 billion in damages and requesting triple damages, bringing the total to $258 billion.
The focus of the lawsuit is Musk's various public statements regarding Dogecoin, primarily made through posts on X (formerly Twitter) between 2021 and 2023. The plaintiffs believe Musk's statements misled investors, leading to significant financial losses.
"These statements are ambitious, boastful, and not factual, easily fabricated," U.S. District Judge Alvin K. Hellerstein wrote in a two-page ruling. "They cannot form the basis of a lawsuit, and no rational investor could rely on them."
The lawsuit was first filed in June 2022 and has undergone four modifications, later updated last year to include an insider trading allegation, with the lawyers representing the plaintiffs accusing Tesla's legal counsel of harassment — the team called the claim 'baseless and bold.'
In Thursday's ruling, the judge stated that the remaining parts of the case brought by disgruntled investors are unclear.
"It is incomprehensible that the allegations constitute the plaintiffs' conclusion of market manipulation, 'pump and dump' schemes, breaches of fiduciary duties that constitute insider trading, or claims under state law."
Plaintiffs' lawyers told Decrypt Musk that Musk's statements and publications "are far from mere boasting," and that the lawsuit involving millions lost "billions of dollars" in the end.
"We live in a world where the richest individuals, like Elon Musk, can do as they please and get away with it," they said. "The Second Circuit Court of Appeals has previously had the courage to make rulings against Musk, and that is where we will find justice in this case," the lawyers said.
Dogecoin started in 2013 as a lighthearted parody of cryptocurrency and later became one of the world's most valuable cryptocurrencies, entering the top 10 by market value in April 2021. According to CoinGecko data, Dogecoin has a market cap of $14.5 billion and a price of $0.10.
DOGE price
This case features highlights from some of Elon Musk's most famous Dogecoin moments.
The plaintiffs referenced Musk's appearance on (Saturday Night Live), where he mentioned Dogecoin during his opening monologue and in later skits. The lawsuit also cited Musk's statements that he would send Dogecoin to the moon with SpaceX and use the cryptocurrency to pay for mission costs.
The lawsuit also cited Musk's assertions that Dogecoin is the currency of the future for Earth.
Musk's affection for Dogecoin remains public, even as legal battles unfold, including a three-day period last year when the X logo was replaced by the Dogecoin mascot Shiba Inu.
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