Elon Musk successfully had a $258 billion lawsuit dismissed against him and Tesla, which accused him of manipulating Dogecoin's price. The judge ruled that Musk's tweets were not factual, and do not warrant legal action. Meanwhile, X is still in trouble in Brazil and faces potential suspension unless a legal representative is appointed in the country. Former FTX co-CEO Ryan Salame withdrew his bid to overturn his guilty plea, and French President Emmanuel Macron denied any involvement in Telegram co-founder Pavel Durov's arrest.
Elon Musk Escapes $258 Billion Dogecoin Lawsuit
Elon Musk and Tesla won the dismissal of a lawsuit that accused them of manipulating the price of Dogecoin (DOGE) and allegedly causing $258 billion in damages. The lawsuit was thrown out on Aug. 29 by US District Judge Alvin Hellerstein of the Southern District of New York.
The judge ruled that the accusations against Musk, which were primarily based on his tweets about Dogecoin, did not hold water. Among the claims were statements by Musk about becoming the official CEO of Dogecoin and his plans to place a "literal" Dogecoin on a SpaceX vehicle destined for the moon. Judge Hellerstein called these statements "aspirational and puffery," but not factual, and not something any reasonable investor could rely on for sound investment advice.
The lawsuit was originally filed in June of 2022 by a group of disgruntled Dogecoin investors who accused Musk of inflating Dogecoin's price by more than 36,000% over two years before allowing it to crash. They also claimed that Musk used his influence as the world's richest man to operate what they described as a Dogecoin Pyramid Scheme. In response, Musk's legal team requested the lawsuit's dismissal, and described the claims as a "fanciful work of fiction."
Despite the case being so high-profile, the price of Dogecoin remained relatively unchanged after the dismissal. According to data from CoinMarketcap, the price of DOGE dropped slightly by 0.28% over the past 24 hours of trading. As a result, DOGE was worth $0.1001 at press time. DOGE was also still in the red by close to 5% on its weekly time frame.
DOGE 1d price chart (Source: CoinMarketCap)
X Faces Suspension in Brazil
X and Musk may be off the hook in the US for now, but this is not the case in Brazil. Brazil’s Supreme Court issued a warning to Elon Musk’s social media platform, X, threatening to suspend the service in the country by Aug. 29, 2024, unless Musk appoints a legal liaison to represent the company in Brazil.
This ultimatum was given after a contentious exchange in which X accused Supreme Court Judge Alexandre de Moraes of threatening its legal representative in Brazil with arrest. In response to these tensions, X announced on Aug. 17 that it was closing its operations in Brazil, but the platform is still accessible to Brazilian users.
The conflict between Musk and Moraes has been ongoing for several months. Musk criticized Moraes for allegedly taking “illegal” actions to force censorship on X. Moraes, on the other hand, accused the platform of allowing the spread of misinformation, especially among supporters of former President Jair Bolsonaro.
Bolsonaro lost the 2022 runoff election to Luiz Inácio Lula da Silva, and claimed the election was rigged. In early 2023, Bolsonaro’s supporters stormed government buildings in a failed coup attempt, which led the Supreme Court to ban Bolsonaro from holding public office until 2030.
There is now a deep political divide in Brazil, Supporters of Moraes and Lula claim they are defending democracy, while Bolsonaro’s supporters accuse the government of corruption. This issue is just part of a much broader international debate on state censorship of online platforms.
Ryan Salame Drops Bid to Overturn Guilty Plea
In other legal news, the former co-CEO of FTX Digital Markets, Ryan Salame, withdrew his petition to vacate his guilty plea related to violations of campaign finance and money-transmitting laws. In an Aug. 29 filing with the United States District Court for the Southern District of New York, Salame's legal team stated that his decision was influenced by his partner, Michelle Bond, who is also facing criminal charges and may raise the matter of his guilty plea in her case.
Bond was indicted on Aug. 22 for campaign finance violations during her 2022 congressional campaign, and is expected to bring these issues to the court’s attention.
Salame initially filed a petition on Aug. 21 seeking a writ of error coram nobis, which could have allowed his guilty plea and 90-month sentence to be vacated by Judge Lewis Kaplan. This move was prompted by a claim that the U.S. government will not investigate Bond for similar violations if he pleaded guilty.
However, prosecutors called these allegations "demonstrably false" and opposed the motion. Salame was originally scheduled to report to prison on Aug. 29, but requested a delay due to medical complications from a dog bite. His new reporting date is set for Oct. 13.
The charges against Salame and Bond are connected to Bond’s 2022 congressional campaign, where prosecutors allege the pair used funds tied to FTX to support her run for New York’s 1st Congressional District. Despite the fact that Bond's candidacy did not advance beyond the Republican primary, both were still charged with felony counts after FTX's collapse.
Salame pleaded guilty in September of 2023, while Bond pleaded not guilty during her Aug. 22 hearing. Both are currently free on $1 million bail each and have surrendered their travel documents.
French President Responds to Controversy Over Durov Arrest
On Aug. 29, French President Emmanuel Macron addressed reporters during his diplomatic visit to Serbia, where he denied any involvement in or prior knowledge of Telegram co-founder Pavel Durov’s trip to France. Macron stated that he was unaware of Durov’s arrival, and that he does not keep track of the movements of all people entering the country, whether they hold French nationality or not. He also shared that Durov’s case will be handled independently by the French justice system.
President Emmanuel Macron speaking at the press conference in Serbia (Source: YouTube)
Macron has faced a lot of international backlash after Durov’s arrest, and many critics are accusing France of authoritarian behavior. Despite Macron’s insistence that the arrest was not politically motivated at all, Durov has been charged by French prosecutors and is currently out on a 5 million euro bail. However, he is still required to stay in France and report to law enforcement weekly.
The arrest has drawn the negative opinions of some well known people in the crypto and tech sectors. Gabor Gurbacs, the former director of digital asset strategy at VanEck, questioned the legality of arresting someone before actually determining if they committed a crime. Helius Labs CEO Mert Mumtaz also criticized Macron for holding tech founders personally liable for not moderating online speech.
The incident has also caused some serious concerns of a broader crackdown on decentralized technology and free speech. Rumble CEO Chris Pavlovski even exited Europe after allegedly receiving threats from French officials.
