Elon Musk, the CEO of Tesla, has been accused of insider trading by memecoin investors in a court filing on May 31, 2022. The group had previously filed a $258 billion class action lawsuit against Musk and his companies in June 2021, alleging that they caused significant losses for Dogecoin holders. The recent filing claims that Musk engaged in “carnival barking market manipulation” through his “publicity circus” to pump up Dogecoin’s price.
The accusations center around Musk’s public appearances and social media activity hyping up Dogecoin starting from April 2019. The lawsuit claims that these stunts boosted Dogecoin’s price by 36,000%, eventually reaching $0.70+ by May 2021. However, the price has since dropped 90% from that high to its current level.
The filing argues that Musk’s pretense that he was just having fun and not seriously promoting Dogecoin is not credible. The investors label Musk an “apex predator” and his millions of Twitter followers as prey. They cite numerous studies that have already demonstrated the impact of Musk’s tweets on Dogecoin’s price, including his announcement that he would accept Dogecoin at SpaceX in 2021 and his visit to Twitter HQ after taking over the company last year.
The investors also claim that Musk and Tesla traded profitably around the billionaire’s “intended moves,” citing blockchain records as evidence. They even tracked down a wallet address allegedly belonging to Musk, which became the largest single holder of Dogecoin by February 2021. That wallet then sold millions of dollars worth of Dogecoin at various times throughout April 2021.
A key part of the lawsuit is the presupposition that Dogecoin is an unregistered security under existing standards from the U.S. Securities and Exchange Commission. Musk was a founder of Dogecoin, but he has remained uninvolved in the project’s development for years.
When the original lawsuit was filed last year, Musk’s lawyers dismissed it as fanciful. They argued that there was nothing unlawful about tweeting support for a legitimate cryptocurrency with a market cap of nearly $10 billion.
The memecoin investors are seeking damages for the losses they claim to have suffered as a result of Musk’s alleged market manipulation.
Elon Musk, the CEO of Tesla, has been accused of insider trading by memecoin investors in a court filing on May 31, 2022. The investors claim that Musk engaged in “carnival barking market manipulation” through his “publicity circus” to pump up Dogecoin’s price. They argue that Musk’s pretense that he was just having fun and not seriously promoting Dogecoin is not credible. The investors are seeking damages for the losses they claim to have suffered as a result of Musk’s alleged market manipulation.