Dogecoin Investors Accuse Elon Musk of Insider Trading
- Elon Musk has expressed public support for Dogecoin since 2019.
- Musk’s tweets and statements about Dogecoin have often affected the price of the cryptocurrency.
- Musk recently announced plans to step down as Twitter’s CEO and will be replaced by Linda Yaccarino, NBCUniversal’s former chair of global advertising and partnerships.
Some dogecoin investors have accused businessman and CEO of Tesla Inc., Elon Musk, of manipulating the cryptocurrency and costing them billions of dollars and have requested to amend a class action lawsuit charging Musk with insider trading.
The investors, in a filing in Manhattan federal court, claimed Musk used hired social media influencers, tweets, his appearance on NBC’s “Saturday Night Live” in 2021, and other “publicity stunts” to profit from the cryptocurrency at their expense.
The investors cited Musk’s recent decision to replace Twitter’s blue logo with Dogecoin’s popular Shiba Inu logo as an example of Musk’s manipulative action. The Twitter CEO reportedly sold roughly $124 million worth of Dogecoin in April, which caused Dogecoin’s price to increase by 30%.
The investors filed their complaint in June 2022 but have revised it on two occasions in response to Musk’s actions. They asked the court for permission to modify their lawsuit, arguing that Musk was guilty of insider trading in DOGE and that the token qualified as a security under the rules of the U.S. Securities and Exchange Commission.
According to the modified lawsuit,
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 emergent pop-culture phenomenon to cross-promote himself and his companies and to pad his obscene fortune, preying on the earnest hopes of vulnerable Americans, including war veterans, blue-collar workers, and the elderly.
Musk’s legal team already filed a request to dismiss the second amendment of the complaint, noting that “funny pictures” and “tweeting words of support” were not fraudulent activities. Musk has shown a special interest in cryptocurrencies but seems more particular about Dogecoin, which he has promoted since 2019.
Musk recently announced that he would be stepping down as CEO of Twitter to focus on other ventures.