Elon Musk called most crypto projects scams while testifying in Oakland this week, bringing Bitcoin, Dogecoin and the old OpenAI token plan into his legal battle with Sam Altman.
In court, Elon was asked about OpenAI’s short-term plans to raise funds through an initial coin offering (ICO) in 2018. “Some have merit, but most are scams,” he said, based on a post by New York Times reporter Mike Isaac.
Elon brings OpenAI’s 2018 token plan into battle over its philanthropic roots
The issue of ICOs came up because OpenAI previously considered creating crypto tokens to help fund nonprofit organizations. An ICO is when a cryptocurrency team sells tokens to raise cash. There is a term for borrowing from an IPO, but it is different from selling stocks.
The ICO boom of the late 2010s attracted a lot of risk money, but many of those token projects subsequently collapsed after receiving funding. Cryptocurrency traders remember those days clearly. It was noisy, fast-paced, and full of people pretending the white paper was business.
That old plan is now in a much larger legal battle. Elon claims that OpenAI breached its founding agreement when it built a commercial business and received a significant investment from Microsoft (MSFT). He said in court that OpenAI “(stole) charity.”
His argument is built around the idea that the company was founded to serve the masses, not to become another closed AI power center competing for revenue.
OpenAI denies that version of events. The company said Mr. Elon recognized that a for-profit entity might be needed to raise sufficient funds.
OpenAI said in its blog post that it supports ICO plans that include the commercial sector. This argument is important because it refutes his claim that later business structures came out of nowhere.
Later, while answering questions from his lawyers, Elon said he was “reassured” by OpenAI CEO Sam Altman and others that the nonprofit would continue to operate as a charity. OpenAI and Sam accused him of harassment.
They also say the real purpose of the lawsuit is to harm xAI’s rivals, the AI company Elon co-founded in 2023. So the court is now dealing with philanthropic promises, AI money, Microsoft, and the six-year-old idea of cryptocurrency financing. A menu of disasters in the ordinary technological world.
Tesla’s Bitcoin numbers show why Elon’s crypto comments fit into a larger market story
Elon hasn’t always been this cold-hearted about cryptocurrencies. During the pandemic bull market, he became one of the most vocal celebrities connected to the market.
Tesla (TSLA) purchased $1.5 billion in Bitcoin in 2021, putting the cryptocurrency directly on the balance sheets of major public companies. This made Tesla one of the first large corporate acquirers at the time.
His tweets about Dogecoin also helped turn the meme coin into a huge retail transaction. DOGE was originally strange in design, but Elon gave it a much wider audience. Traders viewed his post as a price warning. Some made money. Some suffered burns. That’s the code. No one needs a sermon.
Tesla then sold 75% of its Bitcoin in mid-2022. The sale prevented the company from fully benefiting from the subsequent rally following the election of President Donald Trump, when Bitcoin surpassed $125,000 in 2024. While Tesla still maintained some of its positions, the rest of the coins took a hit in the first quarter of 2026.
Tesla reduced the value of its remaining 11,509 Bitcoins by $222 million in the first quarter of 2026, according to regulatory filings. As of March 31, the company held $786 million in crypto assets and reported an after-tax impairment of $173 million. Bitcoin has fallen 10% over the year and was trading at $75,350 at the time of writing.
Elon finished his testimony Thursday morning. Sam Altman and Greg Brockman conducted most of the questioning in court. After being introduced, Sam and Greg sat behind the lawyer and listened. Greg also took notes on a yellow legal pad.
Much of Elon’s testimony focused on his break with open AI leaders, who were looking for enough money to compete with Alphabet Inc.’s Google (GOOGL) and other commercial AI companies. “In exact monetary terms, I gave away $38 million,” Elon said this week.
After Elon left the witness stand, Jared Birchall, who runs Elon’s family firm, testified. Jared told jurors that Elon paid the rent for OpenAI’s early offices. Elon also said he was then told to stop paying that rent in 2020.
