Dogecoin Investors Drop $248 Billion Class Action Lawsuit Against Elon Musk

What do you do if Elon Musk’s Dogecoin fandom has been hitched to the White House?

If you’re an attorney representing Dogecoin investors in a class-action lawsuit that sought $258 billion in damages on market manipulation allegations, then you agree to abandon your case against the tech CEO and his electric automaker.

In a Thursday filing, lawyers representing Musk and the Dogecoin investors informed a Manhattan federal judge that both parties would like to bring the years-long case to an end. That included withdrawing a notice of appeal filed in September and any outstanding motions.

“In light of the district court’s dismissal by a 90-year-old judge who didn’t ‘understand’ the case and Trump’s alliance with Musk creating the Department of Government Efficiency (an acronym for D.O.G.E.), and Doge’s subsequent spiking of 300% since the election, it’s clear that Elon Musk is above the law and can manipulate Dogecoin without penalty or limitation by United States courts,” lawyer Evan Spencer told Decrypt. “As a sole practitioner, I’ve done all I can to hold Musk accountable for market manipulation over the past 2 1/2 years, but now my clients and I agree it’s time to withdraw our appeal.”

Musk and Tesla’s lawyers did not immediately respond to requests for comment from Decrypt.

The billionaire beat the lawsuit in August when U.S. District Judge Alvin K. Hellerstein ruled that Musk’s public statements about Dogecoin were “aspirational and puffery,” rejecting a complaint that had been amended four times with prejudice.

The lawsuit, filed in 2022, claimed that Musk made misleading statements about the meme coin, leaving investors with significant financial losses. Whether it was Musk’s Saturday Night Live appearance causing Dogecoin’s price to tank in 2021, or replacing X’s logo with a Shiba Inu dog last year, the lawsuit scrutinized many of Musk’s best-known Dogecoin moments.

At times, the lawsuit between Musk and Dogecoin investors grew acrimonious. Last year, Spencer accused Tesla’s legal team of using a “bottomless war chest” to lead an unlawful harassment campaign against him, which Tesla rebutted as “unfounded and audacious.”

In dismissing the complaint in August, Judge Hellerstein wrote that it was “not possible to understand” allegations presented on behalf of the Dogecoin investors that detailed an alleged “pump and dump” scheme conducted by Musk and Tesla regarding the meme coin.

Thursday’s filing seeks to remedy several motions for sanctions filed after the case was dismissed. Spencer argued that Musk and Tesla’s lawyers should be disqualified, for example, after a purportedly confidential settlement demand was included in a motion by the defendants.

On top of that, Spencer accused Musk and Tesla’s lawyers of “fraudulently inflat[ing] their legal bills,” seeking $750,000 to dissuade him from filing an appeal. Lawyers for Musk and Tesla responded by stating that Spencer had not indicated the settlement demand was confidential, while agreeing to refile the document in question under seal temporarily.

Meanwhile, Musk and Tesla’s lawyers sought to withdraw their own motion for sanction against Spencer, which claimed he had brought a “frivolous” lawsuit to “extort a quick handout.”

After funneling around $130 million into a super PAC to help elect Donald Trump as president, Musk’s proposed Department of Government Efficiency (D.O.G.E.) has elevated Dogecoin’s presence in the mainstream. Trump appointed Musk to co-lead the initiative earlier this week alongside Vivek Ramaswamy, a Bitcoin-savvy entrepreneur and former presidential candidate.

Featuring the meme coin’s ticker name in press releases and t-shirts on Trump’s campaign website, Dogecoin could be attached to America’s political dialogue for some time. Perhaps the conduct flagged on behalf of Dogecoin investors was just the beginning of Musk’s puffery.

Edited by Andrew Hayward

Editor’s note: This story was updated after publication to include a comment from Spencer.