Elon Musk asks U.S. court to drop $258B lawsuit filed by Dogecoin investors

Tesla chief Elon Musk has asked a New York court to drop a $258 billion lawsuit filed by Dogecoin investors against him.

In a Friday filing in Manhattan Federal court, Musk's legal representatives described the lawsuit as a "fanciful work of fiction" over the CEO's tweets regarding the crypto token. According to his legal team, the investors did not explain how Musk attempted to defraud people in Dogecoin investment.

"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 added. "This court should put a stop to plaintiffs' fantasy and dismiss the complaint."

Musk's legal team said their client's support for Dogecoin "remained unshaken" despite the dismissal plea. Musk also tweeted that he was still buying the token. He has been a strong proponent of Dogecoin over the past years, preferring to purchase the meme token over others, including the benchmark token Bitcoin.

Previously, Musk asked his Twitter followers to share ideas for Dogecoin improvement. He said he would consider accepting the token as a payment mode for services at his companies, Tesla and SpaceX.

A number of Dogecoin investors filed a class action suit against Musk, Tesla and SpaceX, last year, accusing the billionaire of inflating Dogecoin price by over 36,000 percent over two years and then letting its value plunge sharply.

Dogecoin investors accused Musk of knowing that the token lacked intrinsic value while promoting it, alleging that the price crash generated billions of dollars in profit for Musk and select investors at others' expense.

In addition to referring to Musk's Twitter posts, investors listed Musk's appearance on NBC's Saturday Night Live, where he played a role as a financial expert in the court filing. In the Weekend Update segment of that show, Musk mentioned Dogecoin, calling the token "a hustle."

The $258 billion figure represents triple the amount of the approximate decline in Dogecoin value over 13 months before the suit was filed in the New York court.

It was not the first time Musk faced a lawsuit for his posts on Twitter, a platform that he currently owns. Tesla shareholders sued Musk for a tweet in August 2018 in which the CEO claimed that he had secured financing to turn his car manufacturing company into a private entity. San Francisco juries cleared Musk from all allegations regarding the post.

Dogecoin surges

Dogecoin surged by over 20 percent to hit its five-week high of $0.085 following Musk's request to drop the charge against him. Dogecoin was last trading at $0.079, gaining over eight percent in the past 48 hours.

Anonymous crypto analyst Ali Charts said if the token breached its key resistance of $0.0780, it could begin a 20 percent upswing toward the $0.093 level. Other analysts pointed out that Dogecoin could start a bearish trend if it lost its support level.

Recent data from the on-chain analytics firm Santiment showed that Dogecoin whale addresses, each holding over 10 million of the token, had cumulatively bought 1.47 billion in coins (worth approximately $123.1 million) since New Year in various crypto exchange platforms.

Analysts said most of these large Dogecoin investors planned to hold the token for the long term or over a year. These long-term investors currently control over $3.76 billion worth of Dogecoin in circulation.