Investors Accuse Elon Musk of Insider Trading in Dogecoin Lawsuit

A group of investors in a class action suit have accused Elon Musk, Tesla and SpaceX's CEO, of adopting several manipulative techniques to influence the price of Dogecoin in order to trade at a profit at their expense, Reuters reported on Thursday. They alleged that Musk deliberately shot up the price of the memecoin by over 36,000% over two years and then let it crash, costing them billions of dollars in losses.

Dogecoin Investors Hit Elon Musk

According to Reuters, the allegations are contained in a court document filed on Wednesday night before a federal court in Manhattan. The Dogecoin investors requested leave to include the allegations in a third amendment to the class action lawsuit that began in June last year.

Furthermore, the group alleged that the Twitter owner engaged in profitable trading at their expense using several Dogecoin wallets controlled by Tesla or him. On top of that, he allegedly paid online influencers and used his Twitter followership to influence the coin.

Moreover, the investors alleged that Musk used his appearance on NBC’s ‘Saturday Night Live’ in 2021 and other publicity tactics to influence the price of the digital asset.

Elon Musk and Dogecoin

Dogecoin was created in 2013 by two software engineers Jackson Palmer and Billy Markus as a parody of the popular internet meme ‘doge’, which is based on the Shiba Inu dog breed. The cryptocurrency uses the same proof-of-work technology as Litecoin.

Musk, currently the world’s richest person after Bernard Arnault, is a well-known supporter of the memecoin. In the past, he often tweeted about the coin and even suggested in 2021 that his electric car company Tesla will accept dogecoin as a payment option on a test basis.

I will keep supporting Dogecoin

In April this year, Musk even briefly replaced Twitter’s blue bird logo with dogecoin’s Shiba Inu logo for a few days, sending the cryptocurrency's price higher. In the proposed amendment to the lawsuit, the investors claim that Musk sold about $124 million of Dogecoin after the action, causing a jump of 30% in the memecoin’s price.

Musk, known to regularly engage with his followers on Twitter, a social messaging platform he acquired last year, is yet to comment on the report.

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