A United States court has dismissed a $258 billion class action lawsuit that accused Elon Musk and his companies, SpaceX and Tesla, of orchestrating a “crypto pyramid scheme.”

Nearly two years after its filing, Judge Alvin Hellerstein of the US District Court for the Southern District of New York decided to drop the lawsuit, which sought $258 billion in damages. The suit claimed that Musk misused his position to inflate the price of Dogecoin by over 36,000% and then allowed its price to crash, causing losses for investors. The plaintiffs argued that Musk’s actions could be seen as a “Dogecoin Pyramid Scheme,” where he allegedly promoted the cryptocurrency to profit from the volatility he created.

The lawsuit highlighted Musk’s 2021 appearance on Saturday Night Live, where he portrayed a financial expert in a skit and referred to Dogecoin as “a hustle.” Moments after this, the price of Dogecoin dropped over 25% after reaching an all-time high of $0.73 and has yet to return to those levels.

In an Aug. 29 decision, Judge Hellerstein stated that Musk’s comments about Dogecoin were “aspirational and puffery, not factual” and were “susceptible to being falsified.” He added that no “reasonable investor could rely upon them” for making investment decisions. The judge also found that the facts did not support the plaintiffs’ allegations of a “pump and dump” scheme, market manipulation, and insider trading, noting that it was “not possible to understand the allegations that form the basis” of these claims.

Musk’s legal team had previously urged the court to dismiss the suit, arguing that his support for Dogecoin on social media was too imprecise to qualify as allegations of fraud.

Dogecoin’s price did not react to the dismissal at the time of publication and was down 86.4% from its all-time high price.

Over the years, Musk has distanced himself from the cryptocurrency sector. His electric vehicle company, Tesla, which once accepted Bitcoin as a form of payment, reversed its decision shortly after Musk’s SNL appearance. However, the company has reportedly held onto its Bitcoin holdings, as indicated in its Q1 2024 earnings results.

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