Elon Musk on Friday asked a US judge to dismiss a $258 billion racketeering lawsuit alleging he ran a pyramid scheme to back the cryptocurrency Dogecoin.
In an evening filing in Manhattan federal court, lawyers for Musk and his electric car company Tesla Inc. called the lawsuit by Dogecoin investors a “fictitious work of fiction” over Musk’s “innocuous and often silly tweets” about Dogecoin.
The lawyers said the investors never explained how Musk intended to defraud anyone or what risks he had hidden, and that his statements such as “DogeCoin rules” and “No highs, no lows, only Dogecoin rules”. were too vague to support the fraud claim.
“There is nothing illegal about tweeting words of support or funny pictures about a legitimate cryptocurrency that has a market cap of nearly $10 billion,” Musk’s lawyers said. “This Court should put a stop to the imagination of the plaintiff and dismiss the complaint.”
In a footnote, the lawyers also rejected the investor’s claim that Dogecoin qualifies as a security.
Evan Spencer, a lawyer for the investors, said in an email: “We are more confident than ever that our case will be successful.”
Investors accused Musk, the world’s second-richest person according to Forbes, of deliberately driving up the price of Dogecoin by more than 36,000% in two years and then letting it crash.
He added that this resulted in billions of dollars in profit at the expense of other Dogecoin investors, even though Musk knew the currency lacked intrinsic value.
Investors pointed to Musk’s appearance on the “Weekend Update” segment of NBC’s “Saturday Night Live,” where, portraying a fictional financial expert, he called Dogecoin “a hustle.”
The $258 billion loss figure is three times the estimated decline in Dogecoin’s market value in the 13 months before the lawsuit was filed.
The Dogecoin Foundation, a non-profit, is also a defendant and is seeking to dismiss the lawsuit.
Musk’s posts on Twitter, which he owns, have inspired several lawsuits.
He won a court victory on February 3 when a San Francisco jury found him not liable for tweeting in August 2018 that he had arranged financing to take Tesla private.
The case is Johnson et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.
The text of this story is published from a wire agency feed without any modification. Only the headline has been changed.
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