Elon Musk and Tesla Cleared of Dogecoin Class Action Lawsuit
Musk's statements are aspirational and puffery, not factual and susceptible to being falsified, says district judge in his ruling
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Billionaire entrepreneur Elon Musk and his electric vehicle company, Tesla, were cleared on Friday of allegations in a $258 billion class action lawsuit centered around Dogecoin, a popular cryptocurrency. The lawsuit, initiated in 2022, accused Musk of using his Twitter platform—now known as X, which he owns—to manipulate Dogecoin's price to the detriment of cryptocurrency investors.
The plaintiffs contended that Musk’s various statements about Dogecoin—including claims that it was his favorite currency, described it as the "people’s crypto," and touted it as the "future currency of Earth"—were misleading. They also referred to Musk's remarks about Dogecoin potentially becoming the standard for a global financial system, his plans to send a physical Dogecoin to the moon via SpaceX, and statements that suggested Tesla vehicles could be purchased using Dogecoin.
In his ruling, U.S. District Judge Alvin K. Hellerstein of the Southern District of New York stated, “These statements are aspirational and puffery, not factual and susceptible to being falsified.” He further noted that the allegations surrounding Musk and Tesla's purported "pump and dump" scheme lacked sufficient clarity, stating it was "not possible to understand" the claims regarding market manipulation or breaches of fiduciary duty.
The plaintiffs sought a staggering $86 billion in damages, in addition to the potential for triple damages amounting to $172 billion. Once a novelty created as a joke, Dogecoin surged to prominence in early 2021, securing a place among the top ten cryptocurrencies, largely fueled by Musk's frequent supportive tweets. As of Friday, Dogecoin ranked eighth among cryptocurrencies, boasting a market capitalization of $14.7 billion.
Unlike Bitcoin, which has a capped supply, Dogecoin has no limit on its mining potential, leading to its continuous production. Despite fluctuations in his wealth, Musk reclaimed the title of "world's richest person" recently, with a net worth estimated at nearly $244 billion, according to Forbes' Real-Time Billionaires List.
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