Elon Musk Cleared Of Dogecoin Market Manipulation Charges

U.S. District Judge Alvin K. Hellerstein has dismissed a lawsuit against Elon Musk and Tesla Inc., which accused them of manipulating the Dogecoin DOGE/USD market.

What Happened: A group of Dogecoin investors initiated a lawsuit against Musk and Tesla in 2022. The investors claimed that Musk had influenced the DOGE market through his public remarks.

The investors alleged that Musk was involved in a pump-and-dump scheme. However, Hellerstein ruled in favor of Musk’s legal team this week, effectively ending the legal dispute.

Hellerstein examined the specific quotes from Musk that were highlighted in the complaint. He expressed that he “failed to see” how Musk’s comments could be interpreted as market manipulation or a pump-and-dump scheme.

In a statement, Hellerstein said, “These paragraphs allege statements by Musk on ‘Twitter' to the effect that Dogecoin might be his favorite currency and that he had purchased some for his son, that Dogecoin is the people's crypto and the future currency of Earth, that Dogecoin might become the standard for the global financial system and the currency of the internet, that Musk agreed to become Dogecoin's CEO, and that Musk might put a ‘literal' Dogecoin in SpaceX and fly it to the moon and that Dogecoin would pay for the mission, that Tesla vehicles could be bought with Dogecoin, and the like.”

Also Read: Tesla’s Dogecoin Adoption Sends Crypto Market Into Frenzy, Meme Coin Surges By Over 21%

“These statements are aspirational and puffery, not factual and susceptible to being falsified. They cannot be the basis of 10b-5 lawsuit… and no reasonable investor could rely upon them," the statement said.

The judge described Musk’s statements as “aspirational and puffery, not factual and susceptible to being falsified.” He concluded that these comments could not form the basis of a 10b-5 lawsuit and no reasonable investor could rely upon them.

Why It Matters: This ruling is significant as it sets a precedent for future cases involving allegations of market manipulation through public comments. It highlights the importance of discerning between factual statements and aspirational comments when investing in volatile markets like cryptocurrencies.

The dismissal of this lawsuit may also alleviate some of the legal pressure on Musk and Tesla, allowing them to focus on their core business operations.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.