Twitter Inc (NYSE:TWTR) owner and Tesla Inc (NASDAQ:NASDAQ:TSLA) chief Elon Musk’s recent rebrand of his social media platform to incorporate Dogecoin (DOGE) comes only days after the world’s richest man petitioned US courts to throw out a lawsuit over his promotion of the memecoin.
Musk, who bought Twitter in October 2022 for US$44bn, replaced Twitter’s traditional blue bird icon with the cartoon Shiba Inu dog face synonymous with Dogecoin on Monday after tweeting “as promised” above an old conversation in which Musk said the rebrand would be “sickkk”.
Only three days prior, Musk’s lawyers asked a US judge to throw out a US$258bn racketeering lawsuit accusing him of running a pyramid scheme to support the DOGE cryptocurrency.
Original court documents accuse Elon Musk, SpaceX and Tesla as “engaged in a crypto pyramid scheme by way of the Dogecoin cryptocurrency”.
Plaintiffs accuse the defendants of inflating DOGE’s market capitalisation from US$250mln to US$93bn at its peak before crashing the coin down to US$7bn (at the time of filing). They are thus suing for three times the US$83bn in losses.
Lawyers for Musk and Tesla have called the lawsuit by Dogecoin investors a "fanciful work of fiction" while writing Musk’s tweets off as "innocuous and often silly”.
"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."
Lawsuits against cryptocurrency influencers are becoming more common. Podcaster and professional boxer Logan Paul is facing legal action for his failed ‘CryptoZoo’ NFT project, while US regulators have successfully brought charges against Kim Kardashian, Lindsay Lohan and Miles Parks McCollum (known as Lil Yachty) to name a few.
However, these cases have pertained to their failure to disclose compensation for crypto promotions.
It is not evidently clear if Musk received any financial compensation for his many tweets about Dogecoin.
It’s inevitable pic.twitter.com/eBKnQm6QyF— Elon Musk (@elonmusk) July 18, 2020
Dogecoin was launched in 2013 by co-founders Billy Markus and Jackson Palmer for US$0.0002 per coin as a joke and does not have a central issuing authority.
Musk began tweeting about the memecoin in 2019, calling it his “fave cryptocurrency” and “pretty cool”.
In November 2020, SpaceX announced the DOGE-1 payload, called as such because the space exploration group founded by Musk paid for the rocket in DOGE.
Tesla began accepting DOGE as a payment option for certain merchandise in December 2020.
Anticipation among DOGE enthusiasts was high in the build-up to Musk’s appearance on Saturday Night Live (SNL) in May 2021, with punters hopeful for an endorsement to SNL’s millions of mainstream viewers.
Dogecoin’s value tracked closely throughout these and many more instances of Musk-related DOGE activity.
Prior to Musk’s appearance on SNL, DOGE skyrocketed 700%; when he failed to mention DOGE in any of his skits to the disappointment of the DOGE Army, the coin fell 200%.