Elon Musk facing lawsuit for allegedly inflating Dogecoin price

Category: Blockchain Crypto

Twitter CEO Elon Musk is currently facing a lawsuit filed by cryptocurrency investors who claimed that Musk allegedly inflated the price of Dogecoin.

Per the accusations made by the plaintiffs, Musk allegedly manipulated the price of Dogecoin using his social media influence and a guest appearance on Saturday Night Live in 2021, resulting in an increase of over 36,000 percent in two years, followed by a crash.

The lawsuit also cited that the Tesla CEO fluctuated the price of Dogecoin by leveraging his status as the wealthiest person in the world. The plaintiffs are demanding $258 billion in compensation, three times the estimated decrease in Dogecoin’s value in the thirteen months following its peak in May 2021.

Musk has previously revealed his ownership of three cryptocurrencies —Dogecoin, Bitcoin, and Ethereum. Moreover, he has expressed his confidence in Dogecoin’s financial infrastructure, suggesting that it has the potential to become a widely used currency.

Although Dogecoin has experienced considerable declines in value, it remains one of the top 10 cryptocurrencies in market capitalization, at over $10 billion. Additionally, its performance has largely been consistent with the broader cryptocurrency market, experiencing record highs in 2021, followed by prolonged losses.

Musk asks for dismissal

On March 31, Musk requested the dismissal of the $258 billion lawsuit, claiming it was a “fanciful work of fiction” based on his harmless tweets about the cryptocurrency.

Lawyers for Musk and Tesla argued that the investors failed to demonstrate how Musk had intended to defraud anyone or what risks he concealed.

“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,” Musk’s legal team said. “This court should put a stop to plaintiffs’ fantasy and dismiss the complaint.

The lawsuit involving the Dogecoin Foundation is currently pending in the Southern District of New York under the case name Johnson et al. v. Musk et al. (No. 22-05037).

Musk’s support for Dogecoin

On Monday, Dogecoin experienced an over 30 percent surge in price after Musk changed Twitter’s blue bird logo to an image of the digital coin’s logo.

The 51-year-old billionaire, who has been a proponent of Dogecoin for years, periodically tweets about the token, causing price volatility each time.

One of his tweets, featuring a Shiba Inu that resembled the Dogecoin mascot, caused the token’s market cap to increase by $500 million. Musk’s support for Dogecoin was evident throughout 2021, with him referring to himself as the “Dogefather” and promoting the token with slogans such as “Dogecoin is the father of crypto.”

Musk then announced in December 2021 that Tesla would accept Dogecoin as payment for some merchandise. In the following month, when he told Twitter that the Dogecoin payments were live, the cryptocurrency jumped as much as 15 percent.

Dogecoin has been instrumental in the recent surge of meme coins, and Musk has been a significant factor in this growth. After acquiring Twitter, he promised increased cryptocurrency integration, teasing a Dogecoin payment option for Twitter.

You can check the best crypto exchanges where you can buy Dogecoin.