In a significant legal victory for Elon Musk, a federal judge has dismissed a $258 million lawsuit accusing the tech mogul of manipulating Dogecoin prices. Following this win, Musk has hinted at potentially reintroducing cryptocurrency payments for Tesla merchandise.
U.S. District Judge Alvin Hellerstein ruled that Musk's statements about Dogecoin were merely puffery and not actionable claims. The lawsuit, led by a New England electrician and joined by other investors, alleged that Musk and Tesla had engaged in an illegal pump and dump scheme to inflate Dogecoin's value.
Key points from the ruling and its aftermath:
- Judge Hellerstein found that no reasonable investor could rely on Musk's Dogecoin-related statements as serious promises.
- The case was dismissed with prejudice, preventing plaintiffs from amending and refiling the lawsuit.
- Musk's supporters celebrated the victory on social media platforms.
In the wake of this legal triumph, Musk expressed interest in bringing back Dogecoin as a payment option for Tesla merchandise. This move signals a potential rekindling of Musk's enthusiasm for cryptocurrencies, which had waned following the recent market downturn.
Tesla's history with cryptocurrencies:
- Bitcoin investment: Tesla purchased $1.5 billion worth of Bitcoin in February 2021 at an average price of $38,000 per coin.
- Cryptocurrency volatility: Bitcoin's value dropped 64% between March 2021 and December 2022, significantly impacting Tesla's digital asset holdings.
- Current holdings: Tesla's recent SEC filings indicate digital assets with a carrying value of $182 million and a fair value of $722 million as of Q2 2024.
While Musk's interest in reintroducing Dogecoin payments for Tesla merchandise is noteworthy, it remains uncertain whether the company will implement this change. The move could potentially impact Dogecoin's market performance, as evidenced by the 20% price increase in May when Tesla quietly updated its website to allow Dogecoin payments for select products.
As the cryptocurrency market continues to evolve, Tesla's stance on digital assets and Musk's influence on the sector will likely remain subjects of intense scrutiny and speculation.