Argued that ‘the fraudulent act cannot be explained’
Elon Musk and his legal team filed documents in federal court in Manhattan on March 31 asking plaintiffs to dismiss the lawsuit over the cryptocurrency Dogecoin (DOGE). Reuters reported.
Attorneys have failed to explain how the plaintiffs’ investors, Mr. Musk, intended to defraud him by making statements about Dogecoin and what risks he was hiding. It is in the form of
By way of background, investors led by Keith Johnson filed a lawsuit in June 2022 seeking a payment of approximately ¥34 trillion ($258 billion) to Musk for profiting from hyping Dogecoin. was causing
Plaintiffs allege that Musk promoted Dogecoin to gain an unfair advantage, while recognizing that it had no intrinsic value. He also alleged that he was “manipulating a pyramid scheme” with Dogecoin for profit or entertainment.
Musk’s tweets are known to have influenced Dogecoin prices. For example, a Dogecoin-related post in February 2021 received 1 million likes, and the Dogecoin price rose 60% from the previous day.
The plaintiffs also allege that Musk intentionally caused the price of Dogecoin to crash after it skyrocketed. In particular, the Dogecoin price fell by more than 25% shortly after Musk appeared on Saturday Night Live in May 2021 and made negative remarks about Dogecoin.
connection: Earon is sued for 34 trillion yen for Dogecoin hype
What is a pyramid scheme
A kind of pyramid scheme. As well as promising rewards to those who participate, we will also pay rewards when participants recruit new members. In general, the actual investment business is not conducted, and the amount paid by the participant at the time of joining is distributed to existing members. In order for this scheme to be sustained, new participants need to appear indefinitely, so it will eventually fail.
Now, Musk’s lawyers say that Musk’s tweets like “Dogecoin Rulz” and “no highs, no lows, only Doge” make no sense. It is ambiguous and says it cannot support the allegations that Musk committed fraud with it.
No highs, no lows, only Doge
— Elon Musk (@elonmusk) February 4, 2021
Defense counsel argued:
It’s not illegal to tweet supportive words or funny pictures about a legal cryptocurrency that continues to hold a market capitalization of around $10 billion.
The court should put a brake on the plaintiff’s illusions and dismiss the complaint.
controversial in the past
In addition to Dogecoin, Mr. Musk has made controversial remarks about Bitcoin (BTC) and others.
Especially in 2021, cryptocurrency-related tweets stood out. Musk currently has 130 million Twitter followers. As of 2021, he had more than 56 million followers, so his remarks also affected the virtual currency market.
connection: Controversial Elon Musk’s virtual currency related tweet summary