Dogecoin Lawsuit Takes a Turn: Elon Musk Accused of Insider Trading

In the latest development of the legal battle involving Elon Musk and his Dogecoin activities, a group of Dogecoin investors has sought permission to revise a class-action lawsuit against the soon-to-be former CEO of Twitter.

Their claim suggests that Musk manipulated the price of the meme token, adding a new twist to the ongoing legal proceedings.

Recently, a group of investors filed a document on May 31 in the United States District Court for the Southern District of New York, accusing Elon Musk of leveraging his substantial Twitter following and media appearances for personal gains in DOGE trades. 

They assert that Musk engaged in what they deem as overt manipulation of the cryptocurrency market.

By altering Twitter's logo to the Dogecoin emblem and taking other actions, Musk allegedly caused the token's price to surge, benefitting himself while adversely affecting other investors.

After filing their initial complaint in June 2022, the investors have continuously updated their lawsuit, making amendments on multiple occasions due to Elon Musk's subsequent involvement.

Seeking permission from the court, they aim to further revise their complaint, accusing Musk not only of insider trading in DOGE but also asserting that the token qualifies as a security under the regulations set by the U.S. Securities and Exchange Commission.

According to the revised legal filing, as stated in the amended lawsuit, “This is a securities fraud class action arising from a deliberate course of carnival barking market manipulation and insider trading by the world’s richest man Elon Musk, who hijacked an emergent pop-culture phenomenon to cross-promote himself and his companies, and to pad his obscene fortune, preying on the earnest hopes of vulnerable Americans, including war veterans, blue collar workers, and the elderly.”

On April 3, Elon Musk made the notable move of replacing Twitter's logo with that of Dogecoin, shortly after his legal team sought the dismissal of the second amended lawsuit.

In their filing, Musk's team argued that activities such as sharing "funny pictures" and expressing supportive words through tweets did not constitute fraudulent behavior.

As of the time of this publication, Elon Musk had not posted any tweets regarding the amended complaint.

Being one of the wealthiest individuals globally, the CEO of Twitter has been known to frequently discuss Dogecoin and various other cryptocurrencies, which has often resulted in significant surges in the token's price.

Musk began sharing his thoughts on DOGE with his millions of followers on Twitter back in 2019.

Following Elon Musk's acquisition of Twitter in October 2022, reports suggest that the value of the social media platform has significantly declined, reaching approximately 33% of the substantial $44 billion he initially invested.

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