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- Elon Musk, the billionaire business magnate, is embroiled in a lawsuit that charges him with insider trading and Dogecoin price manipulation, which allegedly defrauded investors out of billions of dollars.
- The lawsuit alleges that Musk leveraged Twitter and other platforms to manipulate Dogecoin’s market value, resulting in his significant profits at the expense of investors.
Notorious billionaire Elon Musk finds himself at the heart of a legal controversy that accuses him of insider trading and market manipulation related to the cryptocurrency Dogecoin. The class-action lawsuit alleges Musk took advantage of multiple platforms, including Twitter and his appearance on “Saturday Night Live,” to influence Dogecoin’s price and amass profits while inflicting losses on unsuspecting investors.
The lawsuit, submitted to the Manhattan federal court, purports that Musk exploited a mix of strategies—ranging from Twitter posts and paid online influencers to publicity stunts—to trade beneficially via several Dogecoin wallets linked to him or his electric vehicle company, Tesla. The plaintiffs maintain that these actions resulted in their substantial financial losses while Musk enjoyed substantial profits.
In one notable instance presented in the lawsuit, Musk allegedly sold about $124 million worth of Dogecoin concurrent with his decision to replace Twitter’s blue bird logo with Dogecoin’s Shiba Inu dog logo. This marketing maneuver led to a 30% surge in Dogecoin’s price. Following several negotiations and pushbacks, Musk successfully acquired Twitter for a colossal $44 billion in October of the previous year.
The lawsuit characterizes Musk’s purported activities as a
“conscious course of carnival barking, market manipulation, and insider trading.”
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Investors argue that Musk’s actions not only defrauded them but also served as a means for Musk to promote himself and his companies. According to the court filing, Musk intentionally inflated Dogecoin’s price by more than 36,000% over two years before allowing it to crash, inflicting severe financial losses on the meme cryptocurrency’s investors.
These new allegations form part of a proposed third amended complaint in an ongoing lawsuit that began in June of the previous year. Musk and Tesla had earlier requested a dismissal of the second amended complaint, dismissing it as a “fanciful work of fiction.” However, on May 26, U.S. District Judge Alvin Hellerstein stated he would likely allow the third amended complaint, indicating the defendants would not face prejudice.
The lawsuit currently filed in the U.S. Court of the Southern District of New York holds Musk accountable for his alleged insider trading and market manipulation actions concerning Dogecoin.
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