Tesla CEO Elon Musk has hinted at the possible reintroduction of Dogecoin as a payment method for Tesla products. This comes shortly after Musk and Tesla succeeded in getting a June 2022 lawsuit dismissed. The lawsuit had accused them of defrauding investors through a Dogecoin pump-and-dump scheme. On August 31, Musk responded affirmatively to a query on whether Tesla should accept Dogecoin again.
Dogecoin and Tesla’s Payment History
Tesla had initially adopted Dogecoin for payments in January 2022 but later discontinued the option without an explanation. At the time, the company had warned that only Dogecoin would be accepted and that other crypto assets sent to them would not be refunded. Musk’s consistent advocacy for Dogecoin makes the potential reintroduction less surprising. Earlier this year, Tesla had already hinted at accepting Dogecoin again.
Musk’s support for Dogecoin has significantly influenced its price over time. His endorsement has had both positive and negative impacts on the token’s market value, depending on his statements and actions.
Legal Challenges and Developments
On August 29, Judge Alvin Hellerstein dismissed a $258 billion class-action lawsuit against Musk and Tesla. The lawsuit claimed that Musk and Tesla had manipulated Dogecoin prices, with Musk allegedly using his influence, even appearing on Saturday Night Live, to affect the token’s value. However, the judge ruled that Musk’s statements were overly enthusiastic and could not be considered factual claims that would mislead an investor.
Judge Hellerstein found the allegations of market manipulation, pump-and-dump scheme, and insider trading to be unfounded. He concluded that no reasonable investor would rely on Musk’s exaggerated statements.
Practical Implications
- Investors should remain cautious and perform due diligence when considering investments influenced by celebrity endorsements.
- The dismissal of the lawsuit sets a legal precedent regarding what constitutes market manipulation and exaggerated statements.
- Companies should clearly communicate their payment policies to avoid confusion and potential legal issues.
Despite the positive legal outcome for Musk and Tesla, Dogecoin’s price dropped by over 2% in the past 24 hours, trading at $0.099113. This decline aligns with broader market trends, as major cryptocurrencies like Bitcoin also experienced significant losses during the same period.