© Reuters. FILE PHOTO: A photo of Elon Musk is shown on a smartphone placed against displays 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 racketeering lawsuit accusing him of running a cryptocurrency-backed pyramid scheme.
In an evening filing in federal court in Manhattan, lawyers for Musk and his electric car company Tesla (NASDAQ: ) Inc called the lawsuit filed by Dogecoin investors a “contrived work of fiction” over Musk’s “harmless and often silly tweets” about Dogecoin.
The lawyers said investors never explained how Musk intended to defraud anyone or what risks he covered up, and that his statements like “Dogecoin Rulz” and “no ups, no downs, just Doges” were too vague to support a claim of fraud.
“There is nothing illegal about tweeting words of support or funny pictures about a legitimate cryptocurrency that continues to hold a market cap of nearly $10 billion,” Musk’s lawyers said. “This court should put an end to the plaintiff’s fantasy and dismiss the lawsuit.”
In the note, the lawyers also rejected the investor’s claim that Dogecoin qualifies as a security.
The investor’s attorney, Evan Spencer, said in an email: “We are more confident than ever that our case will be successful.”
Investors have accused Musk, the world’s second-richest person according to Forbes, of deliberately driving up the price of Dogecoin by more than 36,000% over two years and then letting it crash.
They said it generated billions of dollars in profits at the expense of other Dogecoin investors, even though Musk knew the currency lacked intrinsic value.
Investors also pointed to Musk’s appearance on the “Weekend Update” segment of NBC’s “Saturday Night Live” where, portraying a fictitious financial expert, he called Dogecoin a “crowd.”
The $258 billion damages figure is triple the estimated decline in Dogecoin’s market value in the 13 months before the lawsuit was filed.
The Dogecoin Foundation, a non-profit organization, is also a defendant and is seeking dismissal of the suit.
Musk’s posts on Twitter, which he owns, have sparked numerous lawsuits.
He won in court on February 3 when a San Francisco jury found him not responsible for tweeting in August 2018 that he had arranged financing to keep Tesla private.
The case is Johnson et al v. Musk et al., U.S. District Court, Southern District of New York, No. 22-05037.