Elon Musk has asked a U.S. judge to dismiss a $258 billion racketeering lawsuit accusing him of running a pyramid scheme to support Dogecoin, a cryptocurrency. In an evening filing in Manhattan federal court, lawyers for Musk and Tesla called the lawsuit a “fanciful work of fiction” over Musk’s “innocuous and often silly tweets” about Dogecoin. The lawyers claimed the investors never explained how Musk intended to defraud anyone or what risks he concealed. They also said his statements were too vague to support a fraud claim, adding that there was nothing unlawful about supporting a legitimate cryptocurrency.
The investors accused Musk, the world’s second-richest person according to Forbes, of deliberately driving up Dogecoin’s price more than 36,000% over two years and then letting it crash. Investors said this generated billions of dollars of profit at other Dogecoin investors’ expense, even as Musk knew the currency lacked intrinsic value. They also pointed to Musk’s appearance on a “Weekend Update” segment of NBC’s “Saturday Night Live” where he called Dogecoin “a hustle.”
The investors’ lawyer, Evan Spencer, said in an email: “We are more confident than ever that our case will be successful.” The $258 billion damages figure is triple the estimated decline in Dogecoin’s market value in the 13 months before the lawsuit was filed. Dogecoin Foundation, a nonprofit, is also a defendant and seeking the lawsuit’s dismissal.
Musk’s posts on Twitter have prompted multiple lawsuits. He won a court victory on Feb. 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, U.S. District Court, Southern District of New York, No. 22-05037.