Elon Musk Sued for Insider Trading With Dogecoin Using “Publicity Stunts”
Tesla boss Elon Musk is guilty of insider trading against his followers using Dogecoin (DOGE), alleged memecoin investors in a court filing against the tech entrepreneur on Wednesday.
The accusations are a follow-up to a $258 billion class action lawsuit filed by the same group in June 2022, accusing Musk and his companies of causing hundreds of billions in losses for Dogecoin holders.
Elon Musk Dogecoin Agenda
Per the amended filing in a Manhattan federal court on May 31, Elon Musk engaged in “a deliberate course of carnival barking market manipulation,” through a “publicity circus” intended to pump Dogecoin’s price.
These stunts include his public appearances and social media activity hyping up Dogecoin dating back to April 2019. These stunts boosted Dogecoin’s price by 36,000% to $0.70+ by May 2021. Today, DOGE trades 90% down from that high.
“Musk’s pretense that promotion of Dogecoin was just well-meaning fun—not meant to be taken seriously—is not credible,” read the filing, labeling the tycoon an “apex predator,” and his millions of Twitter followers as prey.
The lawsuit noted that numerous studies have already demonstrated the effect of Elon Musk’s tweets on the price of Dogecoin. Indeed, Musk’s announcements that he would begin accepting Dogecoin at SpaceX in 2021, and his visit to Twitter HQ after taking over the company last year, have each contributed to DOGE’s changing price.
Musk exercised his influence again by changing Twitter’s blue bird logo to a picture of the Doge meme’s Shiba Inu for three days, helping pump the coin’s price by 30%.
The filing added that Musk and Tesla traded profitably around the billionaire’s “intended moves,” citing blockchain records as evidence.
Specifically, the lawsuit claims to have tracked down a wallet address – DH5ya – allegedly belonged to Musk, and became the largest single holder of Dogecoin by February 2021. That wallet then sold millions of dollars worth of Dogecoin at multiple times throughout April 2021.
Securities Fraud?
A key part of the lawsuit is the presupposition that Dogecoin is an unregistered security under existing standards from the U.S. Securities and Exchange Commission.
Musk was founded by Dogecoin creators Billy Markus and Jackson Palmer back in 2013 – but they have remained uninvolved in the development of the project for years. Markus himself often jokes with Elon Musk on Twitter, both of whom often provide lighthearted commentary about crypto over Twitter.
When the original lawsuit was filed last year, Musk’s lawyers said the lawsuit was fanciful. “There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion,” they said.
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