Elon Musk was sued by a Dogecoin investor who accused him of running a pyramid scheme to support the cryptocurrency. An investor in dogecoin, originally created as a joke but whose value increased and fell as it was promoted by Elon Musk, filed a $258 billion lawsuit on Thursday against the billionaire and his companies Tesla and SpaceX.
In a complaint filed in federal court in Manhattan, plaintiff Keith Johnson accused Musk, electric car company Tesla Inc and space tourism company SpaceX of racketeering for touting Dogecoin and driving up its price, only to then let the price tumble.
He is asking for his motion, filed in a New York court, to be classified as a class action suit on behalf of those who have suffered losses by investing in dogecoin since 2019. The case is Johnson v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
Johnson is seeking $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled. He also wants to block Musk and his companies from promoting Dogecoin and a judge to declare that trading Dogecoin is gambling under federal and New York law.
Johnson said he believes Musk increased “the price, market cap and trading volume of Dogecoin” through his promotion of it. He included tweets from Musk, the world’s richest man who has more than 98 million followers on Twitter, including one promising that SpaceX would “put a literal Dogecoin on the literal moon.”
Johnson named Elon Musk’s Tesla electric carmaker in the suit since it accepts dogecoin as payment for certain derivative products. SpaceX was also included for having named one of its satellites after dogecoin. Musk is the chief executive officer (CEO) of both Tesla and SpaceX.
Johnson likened dogecoin to a pyramid scheme since the virtual currency has no intrinsic value nor is it a product. Additionally it is not backed by a tangible asset and the number of “coins” is unlimited.
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