Investors in Dogecoin have filed a class action lawsuit accusing Elon Musk, the CEO of Tesla, of engaging in insider trading, claiming that Musk manipulated the cryptocurrency’s market and caused them to suffer significant financial losses.
As reported by CNN, the investors allege that Musk used various means, including Twitter posts, paid influencers, his appearance on “Saturday Night Live,” and other publicity tactics, to trade Dogecoin for personal profit using wallets controlled by him or Tesla.
One notable incident mentioned is when Musk sold around $124 million worth of Dogecoin in April after changing Twitter’s logo to Dogecoin’s Shiba Inu dog logo, which led to a 30% increase in Dogecoin’s value. The investors argue that Musk’s actions constitute a deliberate strategy of market manipulation, insider trading, and self-promotion at their expense.
These recent accusations were included in a proposed third amended complaint, part of an ongoing lawsuit that began in June of the previous year.
Musk and Tesla previously sought to dismiss the second amended complaint in March, considering it to be a fictional creation. However, on May 26, they stated that another amendment would be unwarranted.
In a recent order, U.S. District Judge Alvin Hellerstein indicated that he is likely to allow the third amended complaint, stating that the defendants would not likely be unfairly affected. Furthermore, the investors’ request to dismiss the nonprofit Dogecoin Foundation as a defendant was granted by Hellerstein, with the foundation’s lawyer acknowledging that it was an appropriate outcome.
Musk, who also owns SpaceX and Tesla, has not commented on the matter, and the investors’ lawyer has yet to respond to requests for comment.
