Class-Action Lawsuit by Dogecoin Investors Now Accuses Elon Musk of Insider Trading

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Last Updated on June 2, 2023 by Bitfinsider

The ongoing lawsuit against Elon Musk regarding his Dogecoin transactions has taken an unexpected turn.

The DOGE investor group has now accused the billionaire of engaging in manipulative practises that influenced the price of the popular meme cryptocurrency.

In an amended filing made on May 31 in the U.S. District Court for the Southern District of New York, the investors claim that Musk profited from DOGE trades through “transparent cryptocurrency market manipulation” by leveraging his large Twitter following and public appearances, such as hosting NBC’s Saturday Night Live in May 2021.

According to the plaintiffs, the filing contains a lengthy inventory of additional instances of market manipulation.

The complaint also alleges that Musk, the self-proclaimed “Dogefather” and “Dogecoin CEO”, was “unjustly enriched by billions of dollars” through “undisclosed sales of Dogecoin based on insider information.”

In April of this year, Musk allegedly caused the price of DOGE to increase by 30% by replacing the Twitter blue avian logo with the Dogecoin Shiba Inu logo for three days.

In addition to requesting the court’s permission to amend their complaint to include allegations of Musk’s involvement in insider trading of DOGE, the investors reiterated their position that the meme coin qualifies as a security under the SEC’s guidelines.

The filing 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 emerging pop-culture phenomenon to cross-promote himself and his companies, and to pad his obscene fortune, preying on the earnest hopes of vulnerable Americans, such as war veterans, blue-collar workers, and the elderly.”

The initial $258 billion class action lawsuit was filed in June 2022, and since then, it has undergone two amendments.

In March of this year, the CEO of Tesla and SpaceX filed a motion to dismiss the lawsuit, with his attorneys arguing that “this court should put an end to the plaintiffs’ fantasy and dismiss the complaint.”

Musk’s attorneys stated at the time, “There is nothing illegal about tweeting words of support for or humorous images of a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion.”

In addition, they rejected the investors’ claim that Dogecoin qualified as a security, stating that the investors’ claim was “based solely on rhetoric.”

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