A class action lawsuit has entered a new chapter with Elon Musk, billionaire and CEO of Tesla Inc. and SpaceX, being accused of market manipulation and securities fraud concerning Dogecoin. As stated in the Bloomberg report, the recent amendment to the lawsuit accuses Musk of exploiting his influential status on social media platforms, notably Twitter, and his public appearances, such as hosting NBC’s Saturday Night Live in May 2021, to manipulate the meme cryptocurrency’s value.
A Sequence of Market Manipulation Instances
The plaintiffs present a series of instances, citing them as evident examples of market manipulation. Notable among them was Musk’s tweet featuring two sequential images from the film The Matrix, involving characters Neo and Morpheus, with dialogues referencing Dogecoin, suggesting it as a lucrative investment.
Alleged Insider Trading and Undisclosed Profits
According to the court filing, Musk is also accused of insider trading, allegedly resulting in a substantial profit for the Tesla CEO. The complaint suggests that Musk replaced Twitter’s logo with Dogecoin’s Shiba Inu image, leading to a price spike of around 30% in Dogecoin.
Does Dogecoin Qualify as a Security?
While calling attention to the alleged insider trading, the plaintiffs also put forth that Dogecoin qualifies as a security under the U.S. Securities and Exchange Commission standards. Musk’s legal team, however, has dismissed this claim and is pushing for the case’s dismissal, highlighting the lawful nature of Musk’s Dogecoin-related activities.
Billionaire’s Defending Stand
Musk’s legal team has countered the allegations, emphasizing that there is nothing unlawful about tweeting in support of a legitimate cryptocurrency. They deny the claim that Dogecoin is a security, dismissing the investors’ claim as mere rhetoric. As reported by Reuters, they maintain that the lawsuit is a work of fiction and have argued against any further amendments.
