© Reuters. FILE PHOTO: A photo of Elon Musk is shown on a smartphone placed on representations of the Dogecoin cryptocurrency in this illustration taken June 16, 2022. REUTERS/Dado Ruvic/Illustration/
By Jonathan Stempel
NEW YORK (Reuters) – Elon Musk asked a U.S. judge on Friday to throw out a $258 billion extortion lawsuit that accuses him of running a pyramid scheme to back cryptocurrency.
In an afternoon filing in Manhattan federal court, lawyers for Musk and his electric car company Tesla (NASDAQ:) Inc called the Dogecoin investor lawsuit a “fanciful work of fiction” about “innocuous and often idiots” from Musk on Dogecoin.
The lawyers said the investors never explained how Musk intended to defraud anyone or what risks he was hiding, and that his statements such as “Dogecoin Rulz” and “no ups and downs, just Doge” were too vague to support a fraud claim.
“There is nothing illegal about tweeting words of support or funny images about a legitimate cryptocurrency that continues to have a market capitalization of nearly $10 billion,” Musk’s lawyers said. “This court should put an end to the plaintiffs’ fantasy and dismiss the lawsuit.”
In a footnote, the lawyers also rejected the investor claim that Dogecoin qualified as a security.
The investors’ attorney, Evan Spencer, said in an email: “We are more confident than ever that our case will succeed.”
Investors accused Musk, the second-richest person in the world according to Forbes, of deliberately driving the price of Dogecoin up more than 36,000% in two years and then letting it crash.
They said this generated billions of dollars in profit at the expense of other Dogecoin investors, even when Musk knew the coin lacked intrinsic value.
Investors also pointed to Musk’s appearance on a “Weekend Update” segment of NBC’s “Saturday Night Live” where, playing a fictional financial expert, he called Dogecoin “a hustle.”
The $258 billion figure in damages is triple the estimated decline in Dogecoin’s market value in the 13 months prior to the filing of the lawsuit.
Dogecoin Foundation, a non-profit organization, is also being sued and is seeking dismissal of the lawsuit.
Musk’s posts on Twitter, which he owns, have sparked multiple lawsuits.
He won a court victory on February 3 when a San Francisco jury found him not liable for tweeting in August 2018 that he had arranged financing to take Tesla private.
The case is Johnson et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.
