Elon Musk asks US judge to end $258 billion Dogecoin lawsuit against him

Elon Musk on Friday asked a US judge to dismiss a $258 billion (about Rs 21.20 crore) racketeering lawsuit accusing him of running a pyramid scheme to back cryptocurrency Dogecoin.

In an evening filing in federal court in Manhattan, attorneys for Musk and his electric car company Tesla called the lawsuit filed by Dogecoin investors a “work of fanciful fiction” about “harmless tweets and often idiots” from Musk about Dogecoin.

The lawyers said the investors never explained how Musk intended to defraud anyone or what risks he was hiding, and that his statements such as “Dogecoin Rulz” and “no ups, no downs, only Doge” were too vague to support an allegation of fraud.

“There is nothing illegal about tweeting words of support or amusing images about a legit cryptocurrency that continues to hold a market capitalization of almost $10 billion (around Rs 82,200 crore ),” Musk’s attorneys said. “This court should put an end to the plaintiffs’ fantasy and dismiss the complaint.”

In a footnote, the lawyers also rejected the investors’ claim that Dogecoin qualified as a security.

Investors’ attorney Evan Spencer said in an email: ‘We are more confident than ever that our deal will go through.

Investors have accused Musk, the second richest person in the world according to Forbes, of deliberately driving up the price of Dogecoin by more than 36,000% over two years and then letting it crash.

They said it generated billions of dollars in profits at the expense of other Dogecoin investors, even though Musk knew the currency lacked intrinsic value.

Investors also pointed to Musk’s appearance in a “Weekend Update” segment of NBC’s “Saturday Night Live” where, portraying a fictional financial expert, he called Dogecoin “a stir.”

The $258 billion (approximately Rs. 21,20,200 crore) damages award is three times the estimated decline in the market value of Dogecoin in the 13 months before the lawsuit was filed.

Dogecoin Foundation, a non-profit organization, is also a defendant and seeks dismissal of the lawsuit.

Musk’s posts on Twitter, which he owns, have prompted multiple lawsuits.

He won a court victory on February 3 when a San Francisco jury found him not responsible for tweeting in August 2018 that he had arranged financing to take Tesla private.

The case is Johnson et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.

© Thomson Reuters 2023

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