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- Elon Musk, Twitter and Tesla CEO, has been accused by a group of Dogecoin investors of market manipulation and insider trading in an amended lawsuit.
- The lawsuit alleges Musk used his social media influence and publicity stunts to manipulate Dogecoin prices, resulting in personal profit and investor losses.
The multi-billionaire and entrepreneur Elon Musk is facing renewed scrutiny as a group of investors have amended their lawsuit against him. The investors claim that Musk leveraged his vast social media following and exploited public interest, resulting in a “publicity circus” that skewed the market for Dogecoin, a popular cryptocurrency originally conceived as a joke.
According to the lawsuit filed in the U.S. Southern District Court of New York on May 31, Musk had allegedly exploited his high-profile platform, including Twitter and television appearances like NBC’s “Saturday Night Live,” to promote Dogecoin. The investors argue that these promotional activities significantly influenced the market price of Dogecoin, which resulted in personal gains for Musk while ordinary investors suffered financial losses.
The lawsuit contends that Musk provided misleading information regarding Dogecoin’s nature, its associated risks, and potential benefits. It further alleges that Musk failed to disclose facts about his business interests in the cryptocurrency, and encouraged fans to retain their Dogecoin investments even after mass crypto liquidations by more experienced investors.
In 2019, Musk, who refers to himself as the “Dogefather,” became a significant figure within the crypto community. Before his involvement, Dogecoin trading volume rarely exceeded $20 million per day. However, the price and trading volume skyrocketed as Musk continued to promote DOGE through memes and online posts, implying that its value could reach astronomical heights.
Dogecoin’s value surged by 36,000% to 73 cents between April 1, 2019, when Musk first interacted with the cryptocurrency, and May 7, 2021, the day before his SNL appearance. However, Musk referred to Dogecoin as a “hustle” during the show, leading to a dramatic price drop.
Interestingly, the lawsuit points out that Dogecoin’s price soared by 30% after Musk replaced Twitter’s bird logo with an icon of a Shiba Inu, Dogecoin’s mascot. Following this surge, the investors allege that Musk sold $124 million worth of Dogecoin.
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The lawsuit further details three Dogecoin wallets purportedly belonging to Musk, one of which gained $10.2 billion by October 29, 2021. Another wallet sold $230 million worth of DOGE between October 25 and November 1, 2022, coinciding with Musk’s takeover of Twitter.
This lawsuit, which accuses Musk of conducting
“a deliberate course of carnival barking, market manipulation and insider trading,”
was initially filed as a $258 billion racketeering lawsuit in June 2022.
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