There are similarities with fellow tech mogul Elon Musk
A judge dismissed the lawsuit accusing Musk of manipulating DOGE prices. AFP

KEY POINTS

  • The plaintiffs initially sought $258 billion in damages over the alleged price manipulation scheme
  • Judge Hellerstein said investors shouldn't have relied on Musk's "aspirational and puffery" sentiments on DOGE
  • Musk has been a fan of the world's top memecoin by market value for years

Tech mogul Elon Musk has faced multiple lawsuits in the past years, and among the most-followed legal battles the SpaceX founder faced is one that accused him of manipulating the price of Dogecoin (DOGE), the largest memecoin by market cap.

On Thursday, U.S. District Judge Alvin Hellerstein tossed the lawsuit Thursday, saying it was impossible to understand the allegations that led plaintiffs to initially claim $258 billion in damages.

Tesla, Musk Defrauded Investors through Hyping DOGE: Plaintiffs

Investors alleged in a mid-2022 lawsuit that Musk, Tesla and several other defendants "were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading." The complaint noted how Musk allegedly used "his pedestal" as a billionaire to "operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement."

The plaintiffs went on to accuse Musk of deliberately pushing up DOGE prices by more than 36,000% over a period of two years then let the memecoin crash.

Earlier this year, Musk's lawyers said the claim of $258 billion in damages was fictional and asked the court to dismiss the lawsuit.

What Hellerstein Thinks

In the court decision made Thursday, Judge Hellerstein said the statements made by Musk to supposedly hype of Dogecoin were "aspirational and puffery" and susceptible to being falsified. "They cannot be the basis of the lawsuit ... and no reasonable investor could rely upon them."

"As for Musk and Tesla's alleged 'pump and dump' scheme, it is not possible to understand the allegations that form the basis of Plaintiffs' conclusion of market manipulation, a 'pump and dump' scheme, a breach of a fiduciary duty amounting to insider trading, or the state law claims," Hellerstein said.

DOGE prices were flat after news of the lawsuit's dismissal emerged, as per data from CoinGecko. The meme token is down by over 5% in the past week.

Musk's 'Soft Spot' for Dogecoin

The X owner and Tesla CEO has, in the past, repeatedly reiterated how he is a fan of the memecoin. Since the lawsuit, he has not spoken much about the token or the broader cryptocurrency industry as whole, but just last month, he once again spoke about his favored coin.

During an X Takeover podcast appearance late last month, the tech titan said he has "a soft spot for Dogecoin because I like dogs and memes." He said he will not hype up crypto, but acknowledged that there is "some merit" in Bitcoin and probably other crypto coins.

In March, he said Tesla should allow electric vehicle buyers to make payments in DOGE in the future, though he didn't provide a timeline.

Read more