Dogecoin price manipulation makes Elon Musk the newest subject of an insider trading lawsuit

Dogecoin (DOGE) investors have accused Twitter CEO Elon Musk of insider trading, citing manipulation of the asset's price. The plaintiffs say Musk's actions have cost them billions of dollars in losses. An excerpt from the filing reads:

This is a securities fraud class action arising from a deliberate course of carnival barking, market manipulation, and insider trading enabled Musk to defraud investors and promote himself and his companies.

The investors also accuse Musk of benefitting his companies, Twitter, SpaceX, and Tesla, at the expense of Dogecoin and its community. The update was posted by whale wallet tracker on Twitter Whale Alert (@whale_alert), and corroborated by Reuters. 

Also Read: Elon Musk warns traders against "betting the farm" on his favorite cryptocurrency Dogecoin

Dogecoin investors bring insider trading charges on Elon Musk

Dogecoin (DOGE) investors want Elon Musk, the self-proclaimed Doge father, to be charged with insider trading for manipulating the price of the largest meme coin by market cap. The news sprouts from a May 31 filing in Manhattan federal court where the plaintiffs alleged numerous 'publicity stunts" used by the Twitter and electric car manufacturer CEO "to trade profitably at their expense through several Dogecoin wallets that he or Tesla controls."

Among the issues cited in the class action lawsuit include the April stunt where Elon Musk changed the Twitter logo from the traditional bird symbol to a Shiba Inu (SHIB) dog, as FXStreet reported. Reportedly, the move, which inspired a 30% Dogecoin price surge, saw the famous billionaire investor rake in massive profits of up to $124 million.

Based on the class action, Musk has driven up Dogecoin price by over 36,000% within a two-year span, only to let it crash to his advantage. Notably, the latest accusation has also been featured in the proposed third amended complaint of the June 2022 lawsuit, which US District Judge Alvin Hellerstein said would "likely" hold, as the defendants may not be prejudiced. As reported, Musk pushed for dismissing the second amended $258 billion lawsuit, claiming it was a "fanciful work of fiction."

Insider trading becomes commonplace in crypto

Contrary to regulation, insider trading is becoming a headlining topic in crypto. Barely two days ago, the US Securities and Exchanges Commission (SEC) reached a settlement with Ishan and Nikhil Wahi over claims by the regulator that the nine tokens listed by Coinbase are securities. Notably, these tokens are AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM, and Wahi admitted to trading them with inside knowledge.

Binance CEO Changpeng Zhao (CZ) separated himself and his staff from such pitfalls in his March 28 response to the Commodity Futures Trading Commission (CFTC).

The exchange has a '90-day no-day trading rule' for employees, preventing them from selling a coin within 90 days of their latest buy or vice versa. In so doing, the exchange ensures employees do not trade actively, alongside other measures, including a 'no-futures trading' policy and stark regulations against buying or selling into listings and launch pads.

Dogecoin (DOGE) price remains undeterred by the development, recording a $0.34% daily rise and a 0.18% increase within the hour after the news broke.

Also Read: Will Binance CEO Changpeng "CZ" Zhao be the next Elon Musk for meme coins?