Emmanuel OchayiElon Musk Cleared in $258 Billion Dogecoin Lawsuit
A United States court has dismissed a $258 billion class action lawsuit filed against Elon Musk, Tesla, and SpaceX, which claimed they promoted a “Crypto Pyramid Scheme” through the endorsement of Dogecoin.
The case, which had been in the courts for nearly two years, was dropped by Judge Alvin Hellerstein of the US District Court for the Southern District of New York.
Join our WhatsApp ChannelElon Musk’s Role in the Dogecoin Saga
The lawsuit centred on allegations that Elon Musk used his influence as the world’s richest man to promote Dogecoin, a popular meme-based cryptocurrency.
The plaintiffs claimed that Musk’s promotion led to a massive surge in Dogecoin’s price, which soared by 36,000%.
However, they argued that his actions were motivated by self-interest, intending to profit from the volatility his endorsement created.
“Elon Musk’s promotion of Dogecoin was nothing more than a ploy to manipulate the market for his benefit,” the plaintiffs stated in the lawsuit. They alleged that the drastic drop in Dogecoin’s value after its initial surge caused significant financial losses for investors, which they described as a “Dogecoin Pyramid Scheme.”
Elon Musk’s Influence on Dogecoin
Elon Musk’s involvement with Dogecoin has been widely recognised. Over the years, he has used his massive following on X (formerly Twitter) to promote the cryptocurrency, fuelling speculation that he might be behind the project.
His most notable involvement was in 2021 when he appeared on a Saturday Night Live (SNL) skit, where he jokingly referred to Dogecoin as a “hustle.”
Following the SNL appearance, Dogecoin’s price plummeted by 25% from an all-time high of $0.73 and never fully recovered.
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This steep decline fuelled the allegations against Musk, with the plaintiffs arguing that his actions were irresponsible and financially damaging to investors.
Court Verdict: Musk’s Promotion Was Aspirational, Not Financial Advice
On 29th August 2024, the US court ruled in favour of Elon Musk, dismissing the class action lawsuit.
Judge Hellerstein argued that Musk’s statements about Dogecoin were not factual claims but aspirational comments. “No reasonable investor would have taken Musk’s remarks as financial advice,” the judge stated.
Musk’s legal team had previously pushed for the case’s dismissal, arguing that their client’s comments and subsequent promotion of Dogecoin were not specific enough to constitute fraud.
“Musk’s remarks were intended as playful and aspirational, not as concrete financial advice,” said a spokesperson for the legal team.
Elon Musk’s Evolving Stance on Cryptocurrency
In recent years, Elon Musk has noticeably shifted his stance on cryptocurrencies. Tesla, which once accepted Bitcoin as a payment method, reversed the decision, citing environmental concerns.
Additionally, Musk has largely refrained from promoting Dogecoin or any other cryptocurrency recently, signaling a potential move away from the crypto space.
What to Know About Dogecoin Today
Despite the controversy and the drop in its price, Dogecoin remains the largest meme-based cryptocurrency by market capitalisation, currently valued at over $14 billion. While the hype surrounding Dogecoin has cooled, its success remains strongly tied to the community that formed around it, largely driven by Musk’s influence.
“Dogecoin’s rise and fall is a testament to the power of community and the influence of key figures like Elon Musk,” said a crypto analyst. However, the project’s future remains uncertain as it continues navigating the cryptocurrency market’s fluctuating dynamics.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
