Tesla, Musk Dodge $258 Billion Dogecoin Lawsuit as Judge Dismisses Case

On Thursday, a federal judge dismissed a class action lawsuit accusing Tesla and its CEO, Elon Musk, of market manipulation through public praise of Dogecoin.

The plaintiffs, representing investors who claimed to have lost money due to Musk’s comments on social media in recent years, had sought $86 billion in damages, with a request for triple damages, bringing the total to $258 billion.

The lawsuit centered on Musk’s various public statements about Dogecoin, primarily made via posts on X (formerly Twitter) between 2021 and 2023. The plaintiffs argued that Musk's statements misled investors, leading to significant financial losses.

“These statements are aspirational and puffery, not factual and susceptible to being falsified,” wrote U.S. District Judge Alvin K. Hellerstein in a two-page ruling. “They cannot be the basis of [a] lawsuit, and no reasonable investor could rely upon them.”

First filed in June 2022 and amended four times, the lawsuit was later updated last year to add an accusation of insider trading, with attorneys representing the plaintiffs accusing Tesla’s legal counsel of harassment—a claim the team called “unfounded and audacious.”

In his ruling on Thursday, the judge said the rest of the case being made by the disgruntled investors was unclear.

“It is not possible to understand the allegations that form the basis of plaintiffs' conclusion of market manipulation, a ‘pump and dump’ scheme, a breach of a fiduciary duty amounting to insider trading, or the state law claims.”

Attorneys for the plaintiffs told Decrypt Musk’s statements and publications amounted to "far more than puffery," and the suit involving millions ended up losing "billions of dollars as a result."

“We live in a world where the richest people like Elon Musk do whatever they want and get away with it," they said. "The Second Circuit Court of Appeals has had the spine to rule against Musk before, and that is where we will receive justice in this case,” the attorneys said.

Dogecoin, which began in 2013 as a lighthearted parody of crypto, has since become one of the world's most valuable cryptos, reaching the top 10 in market capitalization by April 2021. Dogecoin has a market cap of $14.5 billion, with its price standing at $0.10, CoinGecko data shows.

The case was a highlight reel featuring some of Musk’s best-known Dogecoin moments.

The plaintiffs cited Musk’s appearance on Saturday Night Live, where he worked mentions of Dogecoin into his opening monologue and a later skit. The lawsuit also cited Musk's declaration that he would send Dogecoin to the moon with SpaceX and pay for the mission using the cryptocurrency.

Musk's assertions Dogecoin was the future currency of Earth were also cited in the suit.

Musk‘s love for Dogecoin remained public, even as the legal battle unfolded, including three days last year when X's logo was replaced with the Dogecoin mascot of a Shibu Inu—a Japanese hunting dog.

Edited by Sebastian Sinclair

Editor's note: Adds comments from plaintiff's attorneys