Elon Musk and his lawyers requested to dismiss the $258 billion lawsuit filed by investors alleging he operated a pyramid scheme to promote the cryptocurrency Dogecoin (DOGE)
The ‘Dogefather’ Elon Musk is facing a huge $258 billion legal suit filed by Dogecoin investors, who allegedly fell for the pyramid scheme they believe DOGE token represents. However, the billionaire’s lawyers call the lawsuit a “fanciful work of fiction,” asking the judge for dismissal.
Musk’s history with the DOGE promotion started back in early 2021. His first tweet in support of the meme coin sent the featured cryptocurrency price up over 800%. Later on, the billionaire often mentioned Dogecoin in his media posts, saying “Dogecoin Rulz” and “no highs, no lows, only Doge”.
Moreover, Elon Musk even queried the acceptance of Dogecoin by Tesla as a payment method in a Twitter poll right after enabling Dogecoin as a payment method in SpaceX, his commercial rocket company.
However, the plaintiffs also refer to Musk’s Saturday Night Live appearance where he portrayed “a fictitious financial expert,” and referred to Dogecoin as “a hustle,” which caused the cryptocurrency’s 25% decline, as an example of market manipulation. This March, DOGE went down another 1.7% over the day and almost 10% on the week when Musk stated he is turning his attention from crypto to artificial intelligence (AI).
The token which once cost $0.74 is now trading at $0.077, obviously causing major losses for crypto investors.
At the same time, Musk’s lawyers believe the allegations are unsubstantial, as “innocuous and often silly tweets” are “too vague” to warrant a fraud claim. Besides, “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,” the lawyers note.
The issue of promoting crypto by media personas and influencers with big social capital is attracting the attention of regulators across the globe. For instance, French lawmakers have recently proposed the outright banning of such promotions.