scorecardElon Musk hit with dogecoin insider trading lawsuit
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Elon Musk hit with dogecoin insider trading lawsuit

George Glover   

Elon Musk hit with dogecoin insider trading lawsuit
CryptocurrencyCryptocurrency1 min read
Elon Musk has been enthusiastic about dogecoin.    Jakub Porzycki/Getty Images
  • Elon Musk has been accused of insider trading in a class action lawsuit.
  • Investors said that the Tesla CEO shilled the meme-based cryptocurrency dogecoin at their expense.

Elon Musk is facing an accusation of insider trading in a proposed class action lawsuit, with investors alleging that the billionaire knowingly manipulated the price of the cryptocurrency dogecoin.

Plaintiffs said in a complaint filed in Manhattan federal court on Wednesday that "Musk and his company, Tesla, wrongfully profited to the tune of billions of dollars on the backs of millions of working Americans" by shilling the meme token.

The amended complaint, which is the investors' third change since the lawsuit started last June, contains a fresh allegation that Musk sold dogecoin worth about $124 million after he switched Twitter's logo to a shiba inu dog in April. That caused the token's price to surge by 30%.

The amendment was reported by outlets including Reuters.

Musk, who is once again the world's richest man, is a longtime dogecoin fan.

In April 2021 he called himself "The Dogefather" on Twitter. The following month he said the token was "the future of currency" on an episode of "Saturday Night Live."

Musk played down that support at an event in London last week, saying he wasn't advising anyone to "bet the farm" on the cryptocurrency.

Dogecoin – which was created as a joke and has no practical use cases – surged in popularity during the crypto boom of 2021 but has since cratered. It's trading at just over 7 cents – 90% below the 68-cent peak on May 8, the day before Musk's "SNL" appearance.

Musk and Tesla questioned whether another amendment to the lawsuit could be justified last week, but judge Alvin Hellerstein said in a separate court order Wednesday that he would likely allow it.

Alex Spiro, a lawyer for both Musk and Tesla, did not immediately respond to a request for comment from Insider, made outside normal working hours.

Read more: Elon Musk's latest financial advice: Don't pour your life savings into dogecoin