Dogecoin Investors Accuse Elon Musk of Insider Trading in Amended Class Action Lawsuit

A group of Dogecoin investors has sought permission to amend a class action lawsuit against future former Twitter CEO Elon Musk alleging he manipulated the price of the meme token.

In a May 31 filing in the United States District Court for the Southern District of New York, the investors alleged that Musk used his social media followers on Twitter, as well as media appearances, to profit from the trading of Dogecoin (DOGE) by through an “open course of cryptocurrency market manipulation.” According to the complaint, Musk profited from DOGE trading at the expense of other investors by driving up the price of the token through actions including changing the Twitter logo to the Dogecoin logo.

The investors filed their first complaint in June 2022 — prior to Musk’s acquisition of Twitter, but after his initial interest in promoting DOGE on the social media platform — but have amended the lawsuit at least twice based on his actions. They asked the court for permission to amend their complaint alleging that Musk was responsible for DOGE’s insider trading, but also to allege that the token was a security under U.S. Securities and Exchange Commission standards.

“This is a securities fraud class action that stems from a deliberate course of market manipulation and insider trading by the richest man in the world, Elon Musk, who hijacked an emerging pop culture phenomenon to promote himself and his companies and aces his obscene fortune, to the sincere hopes of vulnerable Americans, including war veterans, blue collar workers and the elderly,” the amended lawsuit read.

Musk changed the Twitter logo to that of Dogecoin on April 3, a few days after his legal team requested that the second amended lawsuit be dismissed. At the time, Twitter’s CEO’s filing stated that “funny photos” and “supportive tweets” were not fraud.

Related: Elon Musk threatens Microsoft with lawsuit, claims AI trained on Twitter data

Musk had not yet tweeted about the amended complaint at the time of publication. As one of the world’s richest people, Twitter’s CEO has made frequent statements about Dogecoin and other cryptocurrencies, often driving the token’s price up. He started using Twitter to comment on DOGE to his millions of followers in 2019.

Since Musk’s acquisition of Twitter in October 2022, the value of the social media platform has reportedly fallen to about 33% of the $44 billion he paid out. On May 12, he announced he would step down as CEO sometime in June, to be replaced by NBCUniversal’s former president of global advertising and partnerships, Linda Yaccarino.

Magazine: Musk hints at suing Microsoft, U.S. Rep. wants Gensler fired, and more: Hodler’s Digest, April 16-22