Crypto
‘Market Manipulation And Insider Trading’—Elon Musk And Tesla Are Facing A Fresh Nightmare Challenge
Elon Musk and his near-$700 billion electric car company Tesla
TSLA
are facing fresh accusations of market manipulation and insider trading in a lawsuit filed by cryptocurrency investors seeking damages of $258 billion.
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This is the third amendment to the lawsuit, first filed in June last year, after Musk asked the judge to dismiss the lawsuit in March.
The update centers on claims Musk sold around $124 million of the cryptocurrency dogecoin in April after he replaced Twitter’s logo with that of a Shiba Inu dog used by dogecoin—pushing up the dogecoin price by 30%.
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Tesla chief executive Elon Musk has repeatedly called dogecoin is “favorite” cryptocurrency over … [+]
Musk and Tesla, both named as defendants in the lawsuit, took a “deliberate course of carnival barking, market manipulation and insider trading” that allowed them to defraud investors, the filing said.
In April this year, Musk made headlines around the world when he suddenly changed the logo of Twitter—the social media company he bought for $44 billion late last year—to the dogecoin dog, claiming to be following through on a promise made before he bought Twitter.
A U.S. judge said this week he would “likely” allow the third amended complaint, saying the defendants would not likely be prejudiced, Reuters reported, but granting the investors’ request to dismiss the nonprofit Dogecoin Foundation as a defendant.
The dogecoin price rocketed 36,000% over two years, according to the filing, before it crashed back amid a wider crypto market sell-off.
The early 2021 dogecoin rally, also coinciding with the broader crypto market surge, was helped by Musk, who repeatedly posted to Twitter about the meme-based cryptocurrency and talked it up on the NBC comedy sketch show Saturday Night Live in April 2021.
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The dogecoin price has seen a huge price increase since late 2020 but has fallen sharply from a peak … [+]
Forbes Digital AssetsMusk has since allowed people to buy merchandise for Tesla and his rocket company SpaceX with dogecoin.
However, Musk’s support of dogecoin goes back far earlier than its pandemic-era boom. Musk named dogecoin as his “fav” cryptocurrency in early 2019, changed his Twitter biography to say he’s the “former CEO of dogecoin,” and tweeted a doge meme with the caption “dogecoin rulz.”
Musk’s lawyers said in response to an earlier iteration of the lawsuit that the Tesla CEO’s public statements and Twitter posts were too vague to be considered fraud and called the lawsuit a “fantasy.”