Musk Dodges $258M Dogecoin Lawsuit: Judge Rules His Claims Were Mere ‘Puffery’

Elon Musk, the billionaire CEO of Tesla and SpaceX, has long been a vocal supporter of Dogecoin, the meme-inspired cryptocurrency.

From promoting Dogecoin on Twitter (now X) to discussing it on national television, Musk’s statements often sparked significant market activity. However, these enthusiastic endorsements recently led to a $258 million class-action lawsuit, accusing Musk and Tesla of running a “pump and dump” scheme.

The plaintiffs claimed Musk’s comments were designed to inflate Dogecoin’s price, allowing him and others to profit before the price inevitably dropped.

Legal Ruling: Musk’s Dogecoin Statements Are ‘Puffery’

On Thursday, the lawsuit faced a major setback when U.S. District Judge Alvin Hellerstein dismissed the case, ruling that Musk’s statements amounted to “puffery.” The term refers to exaggerated or promotional claims that are not meant to be taken literally or as factual promises.

The judge reviewed several of Musk’s statements, including his tweets declaring Dogecoin as “the people’s crypto” and the “future currency of Earth,” as well as comments suggesting Tesla vehicles could be bought with Dogecoin.

Judge Hellerstein found that no reasonable investor could have relied on these statements as a basis for financial decisions. He concluded that Musk’s comments were intended to generate hype rather than provide serious investment advice.

As a result, the claims of a pump-and-dump scheme were also dismissed, with the judge stating he found it difficult to understand how such a scheme could be proven based on Musk’s remarks.

The Aftermath and Future of Dogecoin

The dismissal of the lawsuit brought relief to Musk’s supporters and Dogecoin enthusiasts, who celebrated the ruling on social media. The court’s decision to throw out the case “with prejudice” means the plaintiffs cannot file an amended lawsuit, although Johnson’s lawyer has indicated plans to appeal.

Despite the legal battle, Dogecoin continues to hold a strong position in the cryptocurrency market. With a market capitalization exceeding $14 billion, it remains the eighth-largest cryptocurrency, although it currently trades around 10¢—significantly lower than its peak of 73¢ in May 2021.

Conclusion: A Legal Win for Musk, but Challenges Remain

Elon Musk’s legal victory marks a significant moment in the ongoing saga of Dogecoin, reinforcing the idea that promotional statements, even from influential figures, are not necessarily grounds for legal action.

However, the ruling also underscores the importance of investor caution in an increasingly speculative and volatile crypto market.

As Dogecoin remains a key player in the crypto space, its future will continue to be shaped by market sentiment, technological developments, and the unpredictable influence of its most famous advocate, Elon Musk.