Benzinga – While Elon Musk has in the past heavily backed Dogecoin (CRYPTO: DOGE) — a meme cryptocurrency that has a wide appeal — and his tweets and mentions have caused spikes in the coin, his support has landed him in hot waters.
What Happened: Musk’s lawyers have filed a motion in the Manhattan federal court to dismiss a lawsuit that accuses the Tesla CEO of operating a pyramid scheme to prop up Dogecoin, Reuters reported on Friday.
The lawsuit brought about by Dogecoin investors is a “fanciful work of fiction” that is based on his “innocuous and often silly tweets” about the meme coin, the lawyers reportedly wrote in a court filing late Friday.
Musk’s attorneys also contended that the investors who had filed the lawsuit did not clarify how Musk had intended to defraud anyone or what risks he had concealed.
“There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion,” the billionaire’s lawyers said.
“This court should put a stop to plaintiffs’ fantasy and dismiss the complaint.” they added.
Musk’s attorneys also took exception to the investors’ claim that Dogecoin was a security.
See Also: How To Buy In Dogecoin (DOGE)
Why It’s Important: Dogecoin, launched in Dec. 2013 by software engineers Jackson Palmer and Billy Markus, hit an all-time high of $0.737567 on May 8, 2021 amid Musk’s appearance on NBC’s “Saturday Night Live” show that year.
In their lawsuit, the plaintiffs accuse Musk of deliberately driving the crypto’s prices up by more than 36,000% over two years and then letting it crash. They additionally argue that the billionaire did this despite being well aware that the currency lacked any intrinsic value.
In response to the lawsuit, Musk said in an interview with Bloomberg at the Qatar Economic Forum in 2022 that he did not ask people to invest in Dogecoin and that he had only pledged support for the cryptocurrency at the request of his employees.
Dogecoin traded up 3.9% at $0.0770, according to Benzinga Pro data.
Read Next: Dogecoin Creator Slams DeFi Project SafeMoon After Liquidity Pool Compromise
Photo: Shutterstock
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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