Investors Accuse Elon Musk of Manipulating DOGE Price in Lawsuit
A group of investors is suing billionaire and Dogecoin enthusiast Elon Musk, alleging that he manipulated the price of the memecoin for insider trading purposes. The lawsuit, filed in Manhattan federal court, claims that Musk’s decision to change Twitter’s logo to the doge mascot in April was part of his scheme.
According to the investors, Musk sold approximately $124 million worth of dogecoin after the logo change resulted in a significant 30% price increase. The court case, which has been ongoing since last June, argues that Musk utilized social media posts, paid online influencers, a Saturday Night Live appearance, and other publicity tactics to artificially boost dogecoin’s value and profit from its sale.
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According to the latest court filing, Elon Musk is facing allegations of defrauding investors through a deliberate course of market manipulation, insider trading, and carnival-like promotion. The filing claims that Musk intentionally drove up the price of dogecoin by an astonishing 36,000% over a span of two years, only to let it crash later.
An investigation conducted by Protos in 2021 examined the impact of Musk’s Twitter posts on various cryptocurrencies. It was found that between May and November 2021, Musk tweeted about dogecoin 30 times on 22 different days. On five of those days, the price of dogecoin surged by more than 20%.
For instance, when Musk stated on May 20 that he had no intention to sell any dogecoin, the meme coin experienced a 32% pump. Interestingly, these price increases often had a lasting effect, with dogecoin sustaining gains of more than 5% a week after a Musk tweet on six separate occasions within the same timeframe.
Musk’s Doge Tweets Impact Limited, Despite Cryptocurrency Market Turmoil
Even amidst the turbulent cryptocurrency market at the end of 2022, Elon Musk’s tweets about dogecoin managed to generate an average 5% increase in the coin’s price. However, the long-term impact of these tweets remained limited.
Also Read This Related: Elon Musk: Bitcoin to Soar in 2023 Summer
In the ongoing case, the US district judge overseeing the matter expressed likelihood that the third amended complaint filed by investors on Wednesday would be allowed. Judge Alvin Hellerstein determined that the defendants would not likely suffer prejudice and granted the investors’ request to remove the Dogecoin Foundation as a defendant.
At the beginning of April, Musk’s legal team sought to dismiss the $258 billion lawsuit, dismissing it as a “fanciful work of fiction.” However, recent developments seem to be unfavorable for Musk. The latest amendments, which now highlight Musk’s decision to change Twitter’s logo to the Doge mascot, contribute to an increasing list of accusations that are becoming harder to ignore.
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