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Elon Musk Faces Accusations of Dogecoin Insider Trading

The Tesla CEO, Elon Musk, finds himself amid fresh accusations of market manipulation and insider trading concerning the popular cryptocurrency, Dogecoin.

Elon Musk
Elon Musk

Musk's Controversial Dogecoin Manipulation Allegations

In an unfolding lawsuit, Elon Musk has been indicted with serious allegations of insider trading. This action has been proposed as a class action by investors who contend that Musk's actions manipulated Dogecoin, the cryptocurrency, causing financial losses that ran into billions of dollars. The lawsuit was filed in a federal court in Manhattan, where the investors laid out their charges in detail.

The Alleged Tactics Behind the Trading

The investors pointed to Musk's use of his Twitter handle, payment to online influencers, his guest appearance on NBC's "Saturday Night Live" in 2021, and other publicity maneuvers as methods of trading profitably at their expense. They believe this was achieved through several Dogecoin wallets that Musk or Tesla Inc controlled. One notable instance includes Musk's move to sell around $124 million worth of Dogecoin after replacing Twitter's blue bird logo with Dogecoin's Shiba Inu dog, which resulted in a 30% price surge.

In response to the charges, Musk's legal representative Alex Spiro refrained from making any comments. Additionally, neither the investors' nor Tesla's lawyer responded immediately to comment requests. In their accusation, the investors have pointed to Musk's calculated ploy to inflate Dogecoin's price by more than 36,000% over two years, followed by a subsequent crash.

Ongoing Developments in the Lawsuit

These charges are the latest in a string of allegations presented in the third amended complaint of a lawsuit that commenced in June of the previous year. Musk and Tesla had previously attempted to dismiss the second amended complaint in March, labeling it a "fanciful work of fiction." They also declared any further amendment as unjustified. However, U.S. District Judge Alvin Hellerstein indicated he would allow the third amended complaint.