• Elon Musk and Tesla have won a lawsuit accusing them of defrauding investors by hyping Dogecoin.
• Investors claimed Musk manipulated Dogecoin's price, causing it to rise by over 36,000% and then crash.
• Judge Hellerstein dismissed the claims, stating Musk's tweets were "aspirational and puffery, not factual.".
• The dismissal marks a significant moment in the debate about high-profile individuals' influence in the cryptocurrency market.

Elon Musk, the CEO of Tesla, and his electric vehicle company have won the dismissal of a federal lawsuit. The lawsuit had accused them of defrauding investors by hyping the cryptocurrency Dogecoin and conducting insider trading, leading to billions of dollars in losses. The decision was issued on Thursday night by U.S. District Judge Alvin Hellerstein in Manhattan.

The investors had accused Musk, who is currently the world's richest person, of using his Twitter posts, a 2021 appearance on NBC's Saturday Night Live, and other publicity stunts to trade profitably at their expense through several Dogecoin wallets that he or Tesla controlled. They claimed that Musk deliberately drove up Dogecoin's price by more than 36,000% over two years and then let it crash, with he and Tesla often timing trades to Musk's public statements and activities concerning Dogecoin.

One of the key instances highlighted by the investors was when Musk sold Dogecoin in April 2023 after replacing Twitter's blue bird logo with the Dogecoin Shiba Inu dog logo, causing Dogecoin's price to rise 30%.

Judge's Verdict and Musk's Defense

However, Judge Hellerstein dismissed these claims, stating that Musk's tweets that Dogecoin was the future currency of Earth, and could be used to buy Teslas or literally flown to the moon by his company SpaceX were aspirational and puffery, not factual and susceptible to being falsified. Judge Hellerstein further stated that no reasonable investor could rely on the tweets to pursue a securities fraud claim. He also said it was not possible to understand the investors' market manipulation and insider trading claims.

The lawsuit was dismissed with prejudice, meaning it cannot be brought again. The investors had originally sought $258 billion and had amended their complaint four times in two years. In response to the dismissal, Musk's lawyer Alex Spiro said in an emailed statement: It's a very good day for Dogecoin. Musk's lawyers had sought a dismissal, arguing that there was nothing wrong with his innocuous and often silly tweets. They also said there was no proof Musk owned two wallets for conducting suspicious trading, or that he or Tesla ever sold Dogecoin.

Musk's Influence and Historical Precedents

Musk's support for Dogecoin began in 2020, and in mid-2021, Dogecoin surged by 36,000%. At the time, Musk clarified that he and his company held Bitcoin, Ethereum, and Dogecoin, but he suggested people remain aware of the volatility of cryptocurrencies. On Saturday Night Live, Musk called Dogecoin a hustle while playing a fictitious financial expert on a segment of Weekend Update.

Musk, who bought Twitter in October 2022 and rebranded it X, is worth $239.3 billion according to Forbes magazine. The case, known as Gorog et al v. Musk et al, was heard in the U.S. District Court, Southern District of New York, under the case number 22-05037. This case is reminiscent of similar events in the past where high-profile individuals have been accused of market manipulation.

For instance, in 2003, Martha Stewart was indicted on several counts of securities fraud and obstruction of justice, related to her sale of ImClone Systems stock. However, unlike Musk, Stewart was found guilty and served a five-month prison sentence.

The dismissal of the lawsuit against Elon Musk and Tesla marks a significant moment in the ongoing debate about the role and influence of high-profile individuals in the cryptocurrency market. It also raises questions about the nature of statements made on social media platforms and their potential impact on investor decisions. As the world continues to grapple with the implications of this new digital frontier, the case serves as important legal precedent, shaping the future of cryptocurrency regulation.