Elon Musk Files Motion to Dismiss $258 Billion Dogecoin Lawsuit

News | April 4, 2023 By:

On Friday, March 31, 2023, billionaire Elon Musk filed a motion to dismiss the $258 billion racketeering lawsuit that accused him of intentionally inflating the price of Dogecoin (DOGE).

Introduced on December 6, 2013, Dogecoin is considered both the first “meme coin” and, more specifically, the first “dog coin.” The cryptocurrency was created as a way to make fun of Bitcoin and the many other cryptocurrencies that boast grand plans to take over the world.

According to reports, Musk used his Twitter platform to express his views on the meme coin, which has led some to claim that his actions amount to market manipulation. in December 2020, Tesla began accepting Dogecoin as a payment option for certain merchandise. In April 2021, the price of Dogecoin rose by more than 100% after the billionaire tweeted an image of Joan Miró’s Dog Barking at the Moon painting captioned “Doge Barking at the Moon.”

The lawsuit, filed in the United States District Court for the Southern District of New York on June 16, 2022, accused Musk, SpaceX, and Tesla of intentionally inflating the price of Dogecoin.

“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.”

The lawsuit is demanding $258 billion in total monetary damages from Musk while requesting the court for an order declaring DOGE trading as gambling in the United States.

In response, Musk’s lawyers filed a motion to dismiss the lawsuit, describing the complaint as a “fanciful work of fiction” based on “innocuous and often silly tweets” about the meme coin.

“According to Plaintiffs, Mr. Musk and Tesla committed fraud in violation of the federal securities laws, civil RICO, and state common law because Mr. Musk posted innocuous and often silly tweets about a cryptocurrency called “Dogecoin,” Musk’s lawyers said. “But 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. Plaintiffs have had multiple opportunities to adequately plead their claims, but they are still unable to articulate any actionable theory. This Court should put a stop to Plaintiffs’ fantasy and dismiss the Complaint.”

The lawyers also rejected the plaintiffs’ claim that Dogecoin is a security.

“Plaintiffs’ securities claims also must be dismissed because, as explained by the Dogecoin Foundation in its motion to dismiss filed simultaneously herewith, at 7-9, Plaintiffs have not pled a transaction in a security listed on a domestic exchange, or any domestic transaction in other securities,” the lawyers said.

On Monday, Dogecoin surged more than 25% after Musk’s Twitter replaced the social-media platform’s bluebird logo with a Shiba Inu dog logo. According to CoinDesk data, the meme coin’s price went as high as $0.1046 versus around $0.077 right before the logo change.

A copy of the original filing can be found here.