A group of Dogecoin investors is seeking to amend a class-action lawsuit against Elon Musk, the soon-to-be former CEO of Twitter. The investors claim that Musk manipulated the price of the meme token through his social media presence and media appearances. This article delves into the allegations made by the investors and the implications for Musk.
Allegations of Cryptocurrency Market Manipulation: Investors Seek to Amend Lawsuit
In a recent filing with the United States District Court for the Southern District of New York, Dogecoin investors have requested permission to amend their class-action lawsuit against Elon Musk. The investors accuse Musk of engaging in an undisguised course of cryptocurrency market manipulation, leveraging his large following on Twitter and media appearances to profit from DOGE trades. They claim that Musk’s actions caused the price of Dogecoin to spike, resulting in losses for other investors.
The Evolution of the Lawsuit and Insider Trading Allegations
The initial complaint was filed by the investors in June 2022, before Musk’s takeover of Twitter. Since then, they have amended the lawsuit twice to reflect Musk’s subsequent actions. In their latest amendment, the investors not only accuse Musk of insider trading with DOGE but also assert that the token should be classified as a security under the U.S. Securities and Exchange Commission’s standards.
The amended lawsuit describes Musk’s conduct as deliberate carnival barking market manipulation and insider trading. It alleges that Musk exploited the emerging popularity of Dogecoin to promote himself, his companies, and further enrich his already substantial fortune. The investors highlight the impact of Musk’s actions on vulnerable Americans, including war veterans, blue-collar workers, and the elderly, labeling his behavior as securities fraud.
Twitter Logo Change and Musk’s Response
On April 3, Musk changed the Twitter logo to that of Dogecoin, shortly after his legal team had requested the dismissal of the second amended lawsuit. Musk’s filing stated that his humorous posts and expressions of support should not be considered fraudulent activities.
Despite the logo change, Musk has not addressed the amended complaint on Twitter as of now. Over the years, Musk has made numerous statements about Dogecoin and other cryptocurrencies, often causing significant price surges. He began sharing his thoughts on DOGE with his millions of followers in 2019.
Musk’s Twitter Takeover and the Value of the Platform
Since Musk’s acquisition of Twitter in October 2022, the platform’s value has reportedly dropped to approximately 33% of the $44 billion he paid. This decline raises questions about the future direction of the social media giant. In an announcement on May 12, Musk revealed his decision to step down as CEO, with Linda Yaccarino, NBCUniversal’s former chair of global advertising and partnerships, set to replace him.
Elon Musk finds himself facing a class-action lawsuit brought forth by Dogecoin investors who accuse him of manipulating the price of the meme token. The investors claim that Musk’s actions through Twitter and media appearances constituted market manipulation and insider trading. As the lawsuit progresses, its outcome may have significant implications for both Musk and the cryptocurrency industry at large. Meanwhile, Musk’s impending departure as Twitter CEO adds another layer of uncertainty to the platform’s future.