Elon Musk’s $258B Dogecoin Lawsuit: Dismissal and Appeal Outcome

The $258 billion lawsuit accusing Elon Musk of running a Dogecoin pyramid scheme was dismissed with prejudice on August 29, 2024, and the plaintiffs later abandoned their appeal. U.S. District Judge Alvin Hellerstein ruled that Musk’s social media statements about the cryptocurrency were “aspirational and puffery, not factual and susceptible to being falsified,” meaning no reasonable investor could have treated them as reliable claims of fact.¹

What the Lawsuit Claimed

Keith Johnson, a Dogecoin investor, filed the original complaint on June 16, 2022, in the U.S. District Court for the Southern District of New York.² The suit named Musk, Tesla, and SpaceX, and later expanded to include The Boring Company, the Dogecoin Foundation, and several individuals connected to the coin.³ The complaint was amended four times over two years.⁴

Plaintiffs alleged that Musk had run a “pump and dump” and a “pyramid scheme,” driving Dogecoin’s price up more than 36,000% through tweets, public appearances, and corporate decisions, then letting it collapse while profiting at investors’ expense.⁵ The claims included market manipulation, insider trading, fraud, and racketeering.⁶ The $258 billion figure came from tripling the estimated decline in Dogecoin’s market value since May 2021.⁷

Much of the complaint centered on Musk’s public promotion of the coin. Plaintiffs pointed to his May 2021 Saturday Night Live appearance, where he called Dogecoin “the future of currency” and agreed it was “a hustle.” The coin’s price had reached roughly $0.73 around the broadcast, and within four days the market cap dropped from $95 billion to $45 billion.⁸ A later filing added an April 2023 allegation: after Musk swapped Twitter’s blue bird logo for the Dogecoin Shiba Inu, causing a reported 30% price spike, he sold approximately $124 million worth of the coin.⁹ Tesla’s decision to accept Dogecoin for merchandise and SpaceX naming a satellite after the coin were also cited as evidence of a coordinated scheme.¹⁰

Why the Judge Threw It Out

Judge Hellerstein dismissed the fourth amended complaint with prejudice, meaning the plaintiffs could not refile.¹ The ruling turned on a well-established rule in securities and fraud law: vague, optimistic statements that amount to “puffery” cannot support a fraud claim, because no reasonable investor treats them as verifiable fact.

Musk’s statements about Dogecoin fell squarely into that category, the judge found. Calling Dogecoin “the future currency of Earth,” saying it “might become the standard for the global financial system,” and joking about being “Dogecoin’s CEO” were characterized as “aspirational and puffery, not factual and susceptible to being falsified.”¹ Because the statements were not the kind of factual representations a reasonable investor could rely on, the fraud theory collapsed.¹¹

The judge dismissed the rest of the case in similar terms. He found the plaintiffs had failed to show a clear link between Musk’s social media activity and any market manipulation, called the insider trading and pyramid scheme claims “unfounded,” and said it was “not possible to understand the allegations” underlying the alleged pump and dump.¹² Musk’s lawyers had argued that his tweets were “innocuous and often silly” and that there was no evidence he controlled the Dogecoin wallets in question, or that he or Tesla had sold the coin.⁵

How the Appeal Ended

Plaintiffs’ attorney Evan Spencer initially said his clients would appeal.¹¹ What followed was a round of post-judgment skirmishing. Musk and Tesla moved for sanctions and attorneys’ fees under Rule 11, citing what they called the “baseless nature of the lawsuit.” Spencer’s team filed cross-motions. According to the defense, Spencer also attempted to negotiate a $5 million settlement in exchange for dropping the appeal.¹³

On November 14, 2024, both sides filed a stipulation ending the fight entirely. The defendants withdrew their sanctions motion. The plaintiffs withdrew their notice of appeal, agreed not to pursue the case in the Second Circuit or any other U.S. court, and agreed not to challenge Judge Hellerstein’s dismissal order.¹⁴ The docket shows the case terminated on August 30, 2024.² The dismissal with prejudice, combined with the plaintiffs’ agreement not to refile, closes the door on the crypto-fraud case for good.

Not to Be Confused With the DOGE Government Agency Lawsuits

A separate wave of litigation emerging in 2025 targets Musk’s role at the Department of Government Efficiency, which shares the “DOGE” name but has nothing to do with cryptocurrency. Those cases involve constitutional claims about the Appointments Clause, DOGE personnel accessing federal data systems, the dismantling of USAID, and the sharing of federal employee records with DOGE agents.¹⁵ They remain active and are unrelated to the Johnson case or to any claims about the Dogecoin cryptocurrency.

1
Yahoo Finance. Elon Musk, Tesla Win Dismissal of Dogecoin Lawsuit
2
CourtListener. Johnson v. Musk, 1:22-cv-05037
3
Fox Business. Elon Musk $258B Dogecoin Lawsuit Adds Plaintiffs
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Teslarati. Tesla, Elon Musk Win Dismissal of Dogecoin Lawsuit
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NDTV. Lawsuit Claiming Elon Musk, Tesla Rigged Dogecoin Dismissed
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The Guardian. Elon Musk, Twitter, and Dogecoin
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Teslarati. Elon Musk $258 Billion Dogecoin Lawsuit Adds New Plaintiffs
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ClassAction.org. Class Action Against Elon Musk Alleges Dogecoin Is a Crypto Pyramid Scheme
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The Guardian. Elon Musk Insider Trading Dogecoin Lawsuit
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Legal Reader. Elon Musk, Tesla, SpaceX, and Dogecoin
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Claims Journal. Elon Musk, Tesla Win Dismissal of Dogecoin Lawsuit
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Anadolu Agency. Elon Musk, Tesla Cleared in $258B Dogecoin Class Action Lawsuit
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Securities Docket. Musk, Dogecoin Investors Go Yet Another Round With Post-Dismissal Sanctions Motions
14
TradingView (Cointelegraph). Dogecoin Investor Lawsuit Against Elon Musk Dropped
15
PBS NewsHour. A Judge Refuses to Toss States’ Lawsuit Against Elon Musk and DOGE