Elon Musk is accused of Dogecoin insider trading

The group of investors amended the claim they filed in June 2022 about a pyramid scheme

02.06.2023 - 11:45

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3 min

What’s new? Tesla and Twitter CEO Elon Musk is accused of Dogecoin (DOGE) meme token insider trading Reuters reports. So, on May 31, the group of investors amended last year’s pyramid scheme lawsuit. The document, filed in Manhattan federal court, says Musk used Twitter posts, paid online influencers, his appearance on NBC’s “Saturday Night Live” show in 2021, and other “publicity stunts” to profitably trade at their expense through several Dogecoin wallets controlled by Tesla or the billionaire himself.

Reuters’ material

What else is known about the charges? Investors said that Musk sold about $124 million worth of Dogecoin in April after he replaced the Twitter logo with an image of a Shiba Inu dog, which is the mascot of the meme token. This led to a 68% increase in the asset.

The plaintiffs accuse Musk of pumping Dogecoin by 36 000% over two years and making “tens of billions of dollars” in profits at the expense of other investors. According to the lawsuit filed in June and later expanded in September 2022, market manipulation and insider trading allowed the businessman to defraud investors and promote himself and his companies. Investors are seeking $258 billion in pecuniary and non-pecuniary damages from Musk.

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In March, Musk and Tesla demanded that the amended complaint be dismissed, calling it a “fanciful work of fiction,” and on May 26 said another amendment to the lawsuit was unjustified.

On May 31, Judge Alvin Hellerstein said he would likely allow the new complaint. He also granted the investors’ request to exclude the non-profit Dogecoin Foundation as a defendant.

Musk told The Wall Street Journal summit on May 24 that he does not advise anyone to buy cryptocurrencies or “bet the farm on” DOGE. In this, the businessman confirmed that the meme token is still his favorite.

As of June 2, 12:15 UTC, DOGE is trading at $0,07219 on Binance, having gained 0,53% in 24 hours. The asset ranks ninth in the overall ranking of cryptocurrencies with a capitalization of $10 billion.

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