As a seasoned crypto investor with a decade of experience under my belt, I must say that the recent dismissal of the $258 billion class action lawsuit against Elon Musk and his companies has brought a sigh of relief to many in the crypto community. While I’ve seen my fair share of lawsuits and court battles in this space, this one seemed particularly far-fetched from the get-go.
A U.S. court declined a class-action lawsuit worth $258 billion that accused Elon Musk and his businesses, SpaceX and Tesla, of organizing a “cryptocurrency Ponzi scheme.” In simpler terms, the lawsuit claimed they were running an illegal investment scheme involving cryptocurrencies.
Approximately two years following the initial court filing, Judge Alvin Hellerstein of the United States District Court for the Southern District of New York has chosen not to pursue a lawsuit demanding compensation totaling $258 billion.
The suit alleged that Musk misused his position as the world’s richest man to inflate the price of Dogecoin over “36,000%” and then let its price crash, leading to losses for investors. The plaintiffs argued that Musk’s actions could be justified as a “Dogecoin Pyramid Scheme,” where he promoted the cryptocurrency to profit from the volatility he allegedly created.
Additionally, the lawsuit brought attention to Musk’s performance on Saturday Night Live in May 2021, during which he impersonated a financial expert in a sketch and labeled Dogecoin (DOGE) as “a scam.” Not long after this, the value of DOGE plummeted by more than 25% from its all-time high of $0.73, and it has yet to regain those price levels since then.
As an analyst, I find it crucial to highlight that in a decision made on August 29th, Judge Hellerstein expressed that my statements concerning Dogecoin were more akin to optimistic expressions or “puffery,” rather than verifiable facts. Furthermore, these statements could potentially be contradicted, implying they are not reliable for making informed investment decisions. No prudent investor would base their choices on such declarations.
As a crypto investor, I found relief when the judge dismissed the accusations against me and others for participating in a “pump and dump” scheme, market manipulation, or insider trading. The judge made it clear that the facts presented did not support such allegations, stating that they were too vague to understand the basis of these claims.
As a researcher, I’ve previously advocated that the court should discard the lawsuit, reasoning that Elon Musk’s endorsements of Dogecoin through social media platforms are not concrete enough to be deemed as charges of fraudulent activity.
At the time of publishing, Dogecoin’s price remained unaffected, and the coin was currently trading 86.4% below its peak record price.
Over the years, Musk has distanced himself from the cryptocurrency sector. His electric vehicle company, Tesla, which once embraced Bitcoin as a form of payment, reversed its decision shortly after Musk’s SNL appearance. Yet the company has reportedly held onto its Bitcoin (BTC) holdings, as reported in its earnings result for Q1 2024.
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2024-08-30 09:38