Elon Musk asked a US judge on Friday to throw out a $258 billion racketeering lawsuit accusing him of running a pyramid scheme to support the cryptocurrency Dogecoin.
In an evening filing in Manhattan federal court, lawyers for
Musk and his electric car company Tesla called the lawsuit by Dogecoin
investors a "fanciful work of fiction" over Musk's "innocuous
and often silly tweets" about Dogecoin.
The lawyers said the investors never explained how Musk
intended to defraud anyone or what risks he concealed, and that his statements
such as "Dogecoin Rulz" and "no highs, no lows, only Doge"
were too vague to support a fraud claim.
There is nothing unlawful about tweeting words of support
for, 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 a stop to plaintiffs' fantasy and dismiss the complaint."
In a footnote, the lawyers also rejected the investors'
claim that Dogecoin qualified as a security.
The investors' lawyer, Evan Spencer, said in an email:
"We are more confident than ever that our case will be successful."
Investors accused Musk, the world's second-richest person
according to Forbes, of deliberately driving up Dogecoin's price more than
36,000 percent over two years and then letting it crash.
They said this generated billions of dollars of profit at
other Dogecoin investors' expense, even as Musk knew the currency lacked
intrinsic value.
Investors also pointed to Musk's appearance on a
"Weekend Update" segment of NBC's "Saturday Night Live"
where, portraying a fictitious financial expert, he called Dogecoin "a
hustle."
The $258 billion damages figure is triple the estimated
decline in Dogecoin's market value in the 13 months before the lawsuit was
filed.
Dogecoin Foundation, a nonprofit, is also a defendant and
seeking the lawsuit's dismissal.
Musk's posts on Twitter, which he owns, have prompted
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, U.S. District
Court, Southern District of New York, No. 22-05037. © Reuters