Elon Musk delivered a stark warning about the cryptocurrency market while testifying in an Oakland courtroom this week during his ongoing lawsuit against OpenAI. According to reports from Fortune and the New York Times, Musk stated that while some crypto assets have merit, the majority are scams.
The testimony emerged from questions about OpenAI's 2018 plan to raise funds through an initial coin offering (ICO). Musk responded directly to the inquiry: “Some of them have merit, but most of them are scams.” The remarks, posted on social media by reporter Mike Isaac, quickly went viral across the crypto community.
The ICO reference is significant because OpenAI once considered creating its own crypto token to help fund its nonprofit mission. The late-2010s ICO boom brought in risky capital, and many token projects collapsed after raising funds. Musk's comments echo longstanding concerns about the high failure rate of such offerings.
Musk's lawsuit claims OpenAI violated its founding agreement by building a commercial business and accepting major investment from Microsoft. He told the court OpenAI "stole a charity." OpenAI, however, argues that Musk was aware of—and even supported—the potential need for a for-profit structure to raise sufficient capital, including the 2018 ICO plan.
Later in his testimony, while answering questions from his own lawyer, Musk said he was “reassured” by OpenAI CEO Sam Altman and others that the nonprofit would continue to act as a charitable entity. OpenAI and Altman have accused Musk of harassment and claim the lawsuit is an effort to harm a rival to xAI, Musk's AI company founded in 2023.
The testimony comes against the backdrop of Musk's own complex history with cryptocurrency. In 2021, Tesla purchased $1.5 billion in Bitcoin, making it one of the first major public companies to hold crypto on its balance sheet. However, Tesla sold 75% of its holdings in mid-2022, missing out on the rally that pushed Bitcoin above $125,000 in 2024. Regulatory filings now show Tesla still holds 11,509 Bitcoin, but reduced the value by $222 million in Q1 2026, reporting an after-tax impairment loss of $173 million.
Musk has also been a vocal advocate for Dogecoin, helping transform the meme token into a major retail trade. At the time of writing, Bitcoin is trading at $75,350, down 10% for the year.
