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On Tuesday, the U.S. Securities and Exchange Commission (SEC), led by Gary Gensler, filed a lawsuit against tech billionaire Elon Musk. The regulatory agency accused Musk of failing to disclose his large stake in Twitter earlier.

According to an SEC rule, investors must declare ownership above 5% within 10 calendar days. In Musk's case, the SEC said he disclosed a 9.2% stake in Twitter on April 4, 2022, instead of March 24, 2022. Musk eventually purchased Twitter for $44 billion in October 2022 and renamed it X.

In its lawsuit, the SEC sought to force Musk to pay a civil fine and disgorge undeserved profits.

Reactions from crypto community

Several market stakeholders have taken to the X platform to share their thoughts on the SEC’s lawsuit against Musk. Commenting on the new development, Dogecoin cofounder Billy Markus, known on X as Shibetoshi Nakamoto, said the lawsuit does not make sense.

He questioned why the SEC would sue Elon Musk for buying Twitter at "artificially low prices."

He reiterated that industry analysts said Twitter was only worth about $30 billion at the time. However, Musk paid $44 billion for the social media platform.

Other community members think the lawsuit is an attack against Dogecoin (DOGE). Recall that Musk strongly supports the meme coin, and his activity with DOGE usually sparks new rallies.

Top crypto lawyer MetaLawMan commented, "There goes the SEC Enforcement budget. Revenge of the DOGE." It is worth noting that Elon Musk is also meant to lead the Department of Government Efficiency (D.O.G.E) in the next administration.

With a new U.S SEC Chairman set to take over soon, it remains unclear how the lawsuit will pan out.

Improvements on X

Intriguingly, the SEC lawsuit only came shortly after Musk announced new updates on X. 

As reported by U.Today, the update is focused on reputation-based content ranking to improve the user experience. For instance, accounts with higher blocking will have a much smaller reach, reducing their overall influence.

Despite the recent lawsuit against Musk, DOGE is showing upsides. Within the last 24 hours, DOGE has increased by 4.14% to trade at $0.3597, per data from CoinMarketCap.