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Elon Musk Faces Legal Battle Over Alleged Dogecoin Scheme and Denies Ownership of Wallets

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Elon Musk, the billionaire tycoon behind multiple companies, has vehemently denied possessing any Dogecoin (DOGE) wallets in light of an ongoing class action lawsuit accusing him of market manipulation and securities fraud related to the meme-based cryptocurrency.

Elon Musk in Legal Crosshairs – Allegations of Dogecoin Scheme and Ownership Denials

The Tesla founder is currently entangled in a monumental legal clash. The legal battle revolves around allegations suggesting Musk’s involvement in orchestrating a pyramid scheme centered around Dogecoin. The lawsuit claims that Musk played a crucial part in a dubious racketeering scheme aimed at bolstering the fortunes of this volatile digital currency.

As detailed in a court filing submitted on June 7, 2023, the allegations claim that Musk sold a staggering 1.4 billion Dogecoins, amounting to a whopping value exceeding $124 million. The court records identify two distinct wallets purportedly associated with the billionaire, which were responsible for unloading these tokens.

This alleged profit-taking supposedly took place over a brief two-day span in April, specifically from the 4th to the 6th, coinciding with Twitter’s temporary replacement of its iconic blue bird logo with Dogecoin’s distinctive Shiba Inu dog emblem.

Nonetheless, there has been a decline in the token’s value during those two days, with its price dropping from $0.095 to $0.085.

Elon and DOGE

Elon Musk’s legal representative, Alex Shapiro, categorically refuted these allegations in a letter obtained by The New York Post. The letter dismisses the claims, stating, “You specifically allege, without any foundation, that the following wallets ‘belong’ to [Musk].”

Moreover, it underscores that the claim’s foundation hinges on the wallets’ purported sale of Dogecoin during a timeframe when, as per the Third Amended Complaint, prices were allegedly experiencing an upward trajectory.

In late May, a group of DOGE investors modified the lawsuit, leveling additional accusations against Musk, alleging manipulative tactics that artificially inflated the token’s price. This amended filing contends that Musk engaged in “transparent cryptocurrency market manipulation,” leveraging his substantial Twitter following and his appearance on NBC’s Saturday Night Live to exert influence over the market.

Elon Musk, who proudly refers to himself as the “Dogefather” and “Dogecoin CEO,” has never shied away from publicly expressing his fondness for the meme-based coin. His enthusiastic promotion of cryptocurrency has frequently taken the form of tweets, leading to recent entanglements with the legal system.

Originally conceived as a humorous response in 2013, intended to satirize the seriousness of the cryptocurrency landscape, the infamous meme coin has witnessed a remarkable surge in popularity and value. Presently, it stands as the ninth-largest token by market capitalization on Coinmarketcap, trading at $0.063 with an astonishing market cap of $9 billion.

Ultimately, the question of whether Elon Musk is the enigmatic “whale” behind Dogecoin or simply a mischievous figure on Twitter remains to be determined by the presiding judge in this complex legal battle.

Closer Look At Accusations & Lawsuit

Elon Musk was accused of insider trading in a class action lawsuit filed by investors. They claimed that Musk had manipulated the price of the cryptocurrency Dogecoin, resulting in significant financial losses for them.

In a filing made in Manhattan federal court, investors alleged that Musk had used various methods to trade Dogecoin for personal profit, while causing harm to others. These methods reportedly included Twitter posts, payments to online influencers, and other attention-grabbing tactics.

Musk’s sale of approximately $124 million worth of Dogecoin in April occurred after he replaced Twitter’s iconic blue bird logo with Dogecoin’s shiba inu dog logo, which resulted in a significant 30% increase in Dogecoin’s price.

The investors described Musk’s actions as a deliberate strategy of market manipulation and insider trading, aimed at defrauding investors while promoting himself and his companies.

At the time, Musk had acquired Twitter in October and was also involved in ventures such as SpaceX and Tesla. Musk’s lawyer, Alex Spiro, declined to comment on the matter, while the investors’ lawyer did not immediately respond to requests for comment.

Allegations leveled against Elon Musk by investors, asserting that he purposefully orchestrated an astronomical 36,000% surge in the price of Dogecoin over a span of two years, only to subsequently let it plummet, inflicting significant financial losses on those involved.

These accusations were presented as part of a proposed third amended complaint in an ongoing lawsuit that was initiated in June of the preceding year.

US District Judge Alvin Hellerstein later indicated a likelihood of allowing the third amended complaint, stating it would not prejudice the defendants. The investors’ request to dismiss the Dogecoin Foundation as a defendant was granted, deemed an appropriate outcome by Seth Levine, the foundation’s lawyer.

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