Investors are accusing Elon Musk, the CEO of Tesla, of insider trading and manipulating Dogecoin, a cryptocurrency, which has resulted in them losing billions of dollars. The investors claim that Musk used various tactics, such as Twitter posts, paid influencers, his appearance on “Saturday Night Live,” and other publicity stunts, to make profitable trades at their expense using Dogecoin wallets controlled by him or Tesla.
One instance mentioned in the filing is when Musk sold around $124 million worth of Dogecoin in April after changing Twitter’s logo to Dogecoin’s Shiba Inu dog logo, causing a 30% increase in Dogecoin’s price. The investors allege that Musk engaged in a deliberate course of market manipulation and insider trading, defrauding them while promoting himself and his companies.
Musk, who owns Tesla and SpaceX, a rocket and spacecraft manufacturer, has not commented on the accusations. The investors’ lawyer has not yet responded to requests for comment.
The investors claim that Musk intentionally drove up the price of Dogecoin by over 36,000% over two years and then allowed it to crash. These allegations are part of a proposed third amended complaint in an ongoing lawsuit that began in June last year.
Musk and Tesla previously sought a dismissal of the second amended complaint, calling it fictional. However, on May 26, they stated that another amendment was not justified. U.S. District Judge Alvin Hellerstein has indicated that he will likely allow the third amended complaint, finding that the defendants would not be significantly prejudiced.
Furthermore, Judge Hellerstein granted the investors’ request to dismiss the nonprofit Dogecoin Foundation as a defendant in the case. The foundation’s lawyer supported the dismissal, stating that it was the appropriate outcome.