Elon Musk is facing allegations of insider trading in a class action lawsuit accusing him of manipulating the price of cryptocurrency Dogecoin, including through posts on Twitter Inc (NYSE:TWTR).
Musk used Twitter, online influencers and appearances on late-night chat shows to toy with the price of the crypto, investors argued in a Wednesday Manhattan federal court filing.
Investors claimed Musk’s “publicity stunts” cost them billions, including his changing of Twitter’s logo to the Dogecoin stamp in April before selling US$124mln worth of the crypto after the price rose 30%.
Musk had been involved in a “deliberate course of carnival barking, market manipulation and insider trading”, the filing added.
Dogecoin’s price has changed dramatically since late 2020, peaking at £0.48 in May 2021, a rise of 6,300% in five months, before eventually falling back to £0.06 currently.
Investors claim Musk is behind the volatility of the crypto asset, arguing he artificially drove up the price over the course of two years before allowing it to crash.
The filing was made under a proposed third amended complaint as part of a lawsuit which began last June, with Judge Alvin Hellerstein saying he would “likely” allow it in court.