Elon Musk, the renowned entrepreneur and wealthiest billionaire, is facing a class-action lawsuit from disgruntled Dogecoin (DOGE) investors. The lawsuit alleges that Musk engaged in insider trading and manipulated the price of Dogecoin, resulting in significant financial losses for the plaintiffs.
The lawsuit, filed in Manhattan federal court, claims that Musk utilized various questionable tactics to control the market and enrich himself while leaving investors in a precarious situation. It asserts that Musk employed paid online influencers, tweets, his highly publicized appearance on popular show called “Saturday Night Live,” and other attention-grabbing stunts to manipulate the price of Dogecoin.
According to the plaintiffs, Musk controlled several Dogecoin wallets, either personally or through Tesla, and orchestrated a deliberate course of market manipulation and insider trading. The filing argues that Musk’s actions constituted illegal behavior, labeling him as the “Dogefather” who engaged in carnival-like tactics to further his own interests.
One specific event cited in the lawsuit alleges that Musk made approximately $124 million from the market pump when he replaced Twitter’s logo with the DOGE symbol. Such seemingly inconsequential actions, when executed by influential figures like Musk, can have swift and dramatic consequences on cryptocurrency prices, providing opportunities for substantial gains.
Musk has vehemently denied all the allegations brought against him. Despite the legal scrutiny, the billionaire remains an ardent supporter of Dogecoin. In May, he stated that DOGE is still his favorite cryptocurrency, citing its humor and association with dogs as reasons for his ongoing endorsement.
The rise and fall of Dogecoin over the past year have been marked by significant volatility. While it remains the most popular meme token on the market, boasting a market cap more than twice that of its closest competitor, Shibu Inu (SHIB), Dogecoin has experienced sharp fluctuations in value, with a decline of approximately 90% from its all-time high in May 2021.
In a separate lawsuit filed earlier, one investor named Keith Johnson launched a substantial $258 billion lawsuit against Musk, accusing him of running a pyramid scheme. The amended complaint now includes seven new plaintiffs and six new defendants, expanding the scope of the legal action.
The lawsuit alleged that Musk, along with the other defendants, profited from speculating about cryptocurrencies while knowing that Dogecoin lacked any fundamental value. Despite the legal challenges, Musk’s support for Dogecoin remains steadfast. He has publicly stated that Tesla will maintain its stake in Dogecoin after selling 75% of its Bitcoin holdings.
This lawsuit, coupled with the previous case, raises concerns about the potential impact of Musk’s actions on Dogecoin and the wider cryptocurrency sector. The allegations against him, if proven true, could undermine investor confidence and highlight the need for greater regulatory oversight in the industry. As the legal battles unfold, the crypto community and investors alike will closely watch the outcomes, as they may shape the future of digital currencies and the accountability of influential figures within the market.