In a significant legal victory for Elon Musk and Tesla, a US district court judge has dismissed a $258 billion lawsuit alleging that the tech mogul and his company manipulated Dogecoin (DOGE) price.
The ruling, which came on August 30, 2024, signals a shift in the dynamics surrounding the popular meme coin, impacting its market trajectory and investor sentiment.
Court rules tweets aspirational, not fraudulent
Judge Alvin Hellerstein of the US District Court for the Southern District of New York ruled in favour of Elon Musk and Tesla, dismissing the class-action lawsuit filed in June 2022.
The lawsuit accused Musk and his electric automotive company of orchestrating a pump-and-dump scheme involving Dogecoin, alleging that Musk’s tweets artificially inflated the token’s price by over 36,000% before it crashed.
The plaintiffs claimed that Musk used his social media platform to manipulate Dogecoin’s price, arguing that his tweets amounted to insider trading and constituted a pyramid scheme.
Judge Hellerstein ruled that Musk’s statements about Dogecoin were “aspirational and puffery,” not factual or fraudulent.
The judge found that no reasonable investor could rely on Musk’s tweets for sound investment advice, noting that the plaintiffs failed to prove a direct link between Musk’s social media activity and alleged market manipulation.
The court’s decision effectively refutes these claims, removing a significant legal burden from Musk and Tesla.
In a motion filed in April 2023 by Musk’s legal team, the team described the lawsuit as a “fanciful work of fiction,” arguing that Musk’s tweets were expressions of optimism rather than actionable investment advice.
Dogecoin (DOGE) price reaction
The dismissal of the lawsuit could have noteworthy implications for Dogecoin’s market performance.
Dogecoin is trading at $0.1018 currently, reflecting a 1.1% increase over the past 24 hours as it recovers from a recent decline of 18.9%. The current 24-hour price range is between $0.09836 and $0.1026.
Despite the recent price dip, DOGE has seen a substantial 55.8% rise over the past year.
Musk’s influence on Dogecoin, which was once a significant driver of price fluctuations, has waned over time.
His tweets about the meme coin used to cause dramatic price swings, but recently even substantial tweets no longer have a major impact on DOGE’s value.
With the legal case behind him, Musk’s focus might shift away from Dogecoin, potentially reducing its volatility and fostering a more stable trading environment.
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