A lawsuit alleging that Elon Musk and Tesla engaged in a $258 billion “pyramid scheme” by promoting Dogecoin on social media has been dismissed. The plaintiffs had claimed that Musk’s tweets misled followers, artificially inflating the value of the meme cryptocurrency, according to a report by Bloomberg.
Dogecoin, launched in December 2013, is widely regarded as the pioneering meme coin, born from internet humor and jokes. Its recognizable logo features a charming Shiba Inu dog, which has become an enduring symbol of cryptocurrency and its playful spirit.
Investors who suffered significant financial losses after investing in Dogecoin are holding Elon Musk accountable for their downfall. These individuals, who invested tens of thousands of dollars in the token, claim that Musk’s frequent and enthusiastic tweets about Dogecoin misled them into believing it was a valuable asset. They allege that Musk’s influence artificially inflated the price of the token, a phenomenon known as “pumping up” the price. Unfortunately, the value of Dogecoin eventually plummeted, leaving these investors with substantial losses, and they are now blaming Musk for promoting the asset and contributing to their financial woes.
On August 29, Federal Judge Alvin Hellerstein of the New York District Court dismissed the lawsuit against Elon Musk, ruling that Musk’s social media statements about Dogecoin were “aspirational” in nature, rather than factual claims that could be proven false. According to the court, no reasonable investor could have relied on these statements as factual. The case, Johnson v. Musk (22-cv-05037), was filed in the US District Court for the Southern District of New York (Manhattan) in 2022.
Additionally, the lawsuit had also alleged that Elon Musk and Tesla engaged in a “pump and dump” scheme involving Dogecoin, in addition to the pyramid scheme claims. However, Judge Hellerstein expressed that these allegations were unclear and “not possible to understand“, ultimately dismissing the lawsuit.
Counsel for the plaintiffs expressed disappointment with the ruling and announced their intention to file an appeal on behalf of their clients.
“Musk’s statements and publications were far more than puffery, and a class of millions lost billions of dollars as a result,” said attorney Evan Spencer on contrary to the case verdict
