Dogecoin investors strike Elon Musk with market manipulation lawsuit
A collective of dogecoin investors has moved to modify their ongoing class-action lawsuit against Twitter’s outgoing CEO, Elon Musk. The amendment accuses Musk of manipulating the meme cryptocurrency’s market price for his gain.
On May 31, a group of dogecoin investors applied for an adjustment to their class-action lawsuit against Elon Musk, the soon-to-depart CEO of Twitter. The litigants assert that Musk exploited his extensive Twitter following and media visibility to artificially drive up dogecoin’s price. They allege he then capitalized on this increase by engaging in strategic DOGE trades, profiting at other investors’ expense.
The original lawsuit, filed in June 2022, came before Musk’s controversial acquisition of Twitter but postdated his initial efforts to promote dogecoin on the platform.
The plaintiffs have twice revised their lawsuit based on Musk’s subsequent activities. They now seek court permission to augment their complaint to include allegations of insider trading and to argue that Dogecoin meets the US Securities and Exchange Commission’s criteria for being classified as a security.
The freshly amended lawsuit states: “This is a securities fraud class action arising from a deliberate course of carnival barking market manipulation and insider trading by the world’s richest man Elon Musk, who hijacked an emergent pop-culture phenomenon to cross-promote himself and his companies, and to pad his obscene fortune, preying on the earnest hopes of vulnerable Americans, including war veterans, blue-collar workers, and the elderly.”
While Musk has yet to respond to the most recent lawsuit amendment, his actions on Twitter, such as changing the platform’s logo to the Dogecoin emblem, have previously caused a surge in the cryptocurrency’s price. Crypto newsletter Milk Road suggests that Musk sold $124 million worth of DOGE following the move.
Despite Twitter’s value reportedly plummeting by 33% since Musk’s takeover in October 2022, his influence on cryptocurrency markets remains a topic of controversy and legal scrutiny.