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- Dogecoin proponent Elon Musk has won a major lawsuit against some of the coin’s aggrieved investors.
- The market is filled with speculations about what this victory might mean for the future of DOGE’s price.
Tesla’s CEO Elon Musk has been cleared of charges in a lawsuit accusing him of defrauding investors by promoting the trading of Dogecoin (DOGE). This marks an important development for both Musk and the crypto community and has raised questions about the future price direction for DOGE.
Elon Musk Cleared of Trading Lawsuit
U.S. District Judge Alvin Hellerstein in Manhattan ruled in favor of Musk on Thursday over insider trading accusations. Specifically, Musk was accused of using several X posts, a 2021 appearance on NBC’s “Saturday Night Live,” and other publicity stunts to inflate Dogecoin’s price. According to the details, the Tesla CEO could do this using Dogecoin wallets controlled by him and his company.
The lawsuit claimed Musk deliberately inflated Dogecoin’s price by over 36,000% within two years before allowing it to crash. The complainants noted that investors trade when Musk and Tesla issue public statements. They cited when Dogecoin’s price rose to 30% after Musk replaced Twitter’s blue bird logo with that of Dogecoin, the Shiba Inu dog breed.
As noted in our earlier report, the investors initially sought $258 billion for damages and amended their complaint four times in two years.
However, Judge Hellerstein has dismissed the investors’ lawsuit against Musk for several reasons. First, the Judge said Musk’s posts describing Dogecoin as the future currency of Earth or his company SpaceX flying to the moon were “aspirational and puffery, not factual and susceptible to being falsified.”
According to Judge Hellerstein, no reasonable investor could pursue a securities fraud claim just by relying on Musk’s posts. The judge also added that it was difficult to understand the claims of insider trading and investors’ market manipulation.
As a result, Judge Hellerstein ruled out the lawsuit with prejudice, meaning it cannot be brought for retrial.
Expectations of Price Surge for DOGE
Lawyers representing investors have yet to respond to the ruling. On the other hand, Musk’s lawyer, Alex Spiro, has issued an email statement stating,
It’s a very good day for Dogecoin.
This statement has ignited expectations about an imminent price rally for DOGE. At press time, DOGE was trading at $0.1017, demonstrating up by 0.75% in 24 hours.
However, the trading volume decreased by 10.2% in the same timeframe to $490 million. This indicates a lowered investor attraction to the memecoin, a trend that might change shortly.
In the longer term, DOGE could continue on a bullish momentum further due to Musk’s close tie with the memecoin. As noted in our earlier post, Dogecoin climbed to over 3% within a minute after Musk and Tesla launched a counterattack against the attorney representing investors in the lawsuit. Though mild, such a surge can likely be repeated now that the lawsuit has been dismissed.
Also, many could see the lawsuit dismissal as a reinforcement of Dogecoin’s legitimacy, likely leading to increased token adoption. If this happens, DOGE’s price could spiral higher.
