A United States court dismissed a $258 billion class action lawsuit claiming that Elon Musk and his companies, SpaceX and Tesla, orchestrated a “crypto pyramid scheme.”
Almost two years after the filing, Judge Alvin Hellerstein of the US District Court for the Southern District of New York decided to drop the lawsuit seeking $258 billion in damages.
The suit alleged that Musk misused his position as the world’s richest man to inflate Dogecoin’s price over 36,000% and then let it crash, leading to investor losses. The plaintiffs argued Musk’s actions resembled a "Dogecoin Pyramid Scheme," where he promoted the cryptocurrency for personal gain.
The lawsuit cited Musk’s 2021 appearance on Saturday Night Live, where he called Dogecoin "a hustle," causing DOGE’s price to drop over 25% from its all-time high of $0.73.
In an Aug. 29 decision, Judge Hellerstein stated Musk’s remarks were "aspirational and puffery, not factual," and no reasonable investor could rely on them for investment decisions. He added that the plaintiffs’ claims of a "pump and dump" scheme, market manipulation, and insider trading lacked a clear basis.
Musk’s legal team had urged the court to dismiss the suit, arguing that Musk’s social media support for Dogecoin was too vague to constitute fraud allegations.
Dogecoin’s price did not react to the lawsuit’s dismissal and remains 86.4% below its all-time high. Musk has distanced himself from the cryptocurrency sector; Tesla, after initially accepting Bitcoin for payments, reversed this decision but reportedly still holds its BTC.
Over the years, Musk’s involvement with cryptocurrency has been contentious, but this dismissal marks a significant legal victory for him and his companies.
