Crypto investors who appealed the Aug 29 dismissal of the case against Elon Musk for fraud and insider trading are taking the lawsuit back.
In addition to the withdrawal of their appeal, the investors are letting go of the sanctions against Musk’s lawyers. They previously alleged that Tesla’s CEO’s lawyers were fraudulently interfering in the case.
On the other Musk and Tesla have also dropped their request to sanction the other party’s lawyers for pushing a “frivolous” case. They alleged that the investors’ lawyers were constantly changing their legal arguments and pressurizing Musk and his company for settlement over money.
The agreement for the dismissal of the appeal and the motions from both parties were handed over to Manhattan federal court on Thursday night. However, the agreement still awaits approval by Alvin Hellerstein (US District Judge).
Allegations of Market Manipulation
The initial lawsuit demanded $255 billion in compensation, stating that Musk had influenced Dogecoins’ price through tweets and interviews. The lawsuit alleged Musk and Tesla participated in a “crypto pyramid scheme” by promoting Dogecoin and manipulating its value. Plaintiffs cited Musk’s 2021 episode of Saturday Night Live where he called himself “The Dogefather” and his many tweets about Dogecoin as evidence of market manipulation.
“Defendant Musk is the self-appointed ‘Dogefather,’ ‘former CEO of Dogecoin,’ …… who assembled the ‘Doge Army’ ….to increase the price, market cap and trading volume of Dogecoin.”
Plaintiff Keith Johnson
The investors further stated that Musk’s remarks, including that Dogecoin could be the ‘currency of the Earth,’ influenced the market. They further stated that Musk’s statement led to fluctuations in the price of the memecoin.
In the initial lawsuit, investors alleged that Musk’s tweets were false and deceptive and that Dogecoin prices were being manipulated. Musk’s lawyers said the allegations were unfounded and that there was no illegality in supporting or joking about a genuine crypto-currency. Musk’s lawyers filed a motion to dismiss the case in April 2023 which described the lawsuit as “a work of fiction”.
However, on August 29, Judge Hellerstein ruled that the case had no legal ground. The lawsuit’s withdrawal marks the end of a contentious legal battle
Dogecoin is one of the most popular cryptocurrencies, with a market capitalization of $52 billion. At the time of this writing, it was trading at $0.357 and it has risen by 84% and 183% in the last week and a month, respectively. However, the coin is still far from its all-time high of $0.731, set on May 08, 2021.
