When billionaire and Dogecoin evangelist Elon Musk changed Twitter’s logo to the doge mascot in April, no one was laughing but him. According to a group of investors suing Musk, it’s just another example of the world’s richest man manipulating the memecoin’s price to engage in insider trading.
In a proposed third amended complaint filed on Wednesday in Manhattan federal court, investors say Musk sold about $124 million of dogecoin after Twitter’s logo change led to a 30% price jump. The court case, ongoing since last June, argues that Musk used social media posts, paid online influencers, a Saturday Night Live appearance, and other “publicity stunts” to pump doge and sell at a profit.
Musk was able to defraud investors through a “deliberate course of carnival barking, market manipulation and insider trading,” the latest filing read. The Tesla chief is accused of driving up dogecoin’s price by over 36,000% over two years and letting it crash.
At the end of 2021, Protos investigated just how much Musk had pumped various cryptocurrencies through Twitter posts alone. Between May and November 2021, he tweeted about doge 30 times on 22 different days. On five of those days, doge pumped more than 20%. When Musk said he hasn’t and won’t sell any doge on May 20, the meme coin pumped 32%. These pumps tended to have a long tail — on six separate occasions in the same time frame, dogecoin sustained more than 5% gains a week after a Musk tweet.
By the end of 2022, the cryptocurrency market was in a tailspin. Still, Musk’s doge tweets managed to pump the coin by 5% on average, but longterm impact was limited.
According to the US district judge presiding over the case, the third amended complaint filed on Wednesday would “likely” be allowed. Judge Alvin Hellerstein said the defendants weren’t likely prejudiced and granted the investors’ request to remove the Dogecoin Foundation as a defendant.
At the start of April, Musk’s lawyers moved to dismiss the $258 billion lawsuit. According to them, it was a “fanciful work of fiction.” However, it appears that proceedings aren’t going Musk’s way. These latest amendments, which now include Musk’s poor choice to change Twitter’s logo to the Doge mascot, add fuel to a growing list of accusations that are becoming increasingly challenging to ignore.