Elon Musk, Tesla Accused of Dogecoin Pyramid Scheme in $258B Suit
2022.06.17 15:01
Elon Musk, Tesla Accused of Dogecoin Pyramid Scheme in $258B Suit
- Tesla CEO Elon Musk is being sued for $258 billion by a Dogecoin investor over an alleged pyramid scheme to support the cryptocurrency.
- In a lawsuit filed in federal court in Lower Manhattan on Thursday, an investor named Keith Johnson accused Elon Musk and his two firms Tesla and SpaceX.
- According to Johnson’s estimate, investors have lost a total of around $86 billion dollars.
A class-action lawsuit worth $258 billion has been filed against Tesla and SpaceX CEO and Founder Elon Musk, his aforementioned companies over alleged “engag[ing] in a crypto pyramid scheme.” The plaintiff, Keith Johnson, who invested early and promoted Dogecoin, filed the complaint in a federal court in Manhattan on Thursday.
Johnson is accusing Musk, Tesla, SpaceX, and DOGE of “a fraudulent scheme to artificially inflate the price” of Dogecoin (DOGE) through “false and misleading” tweets, according to the court filing. He is now suing Musk for up to $86 billion in damages.
What is more, the group of DOGE investors whom Johnson claims to be representing are also seeking $172 billion in damages. As per the suit, this is a “reasonable estimate of investors’ losses” from trading DOGE since 2019.
The suit also claims that Musk’s tweets about Dogecoin were part of a “pump-and-dump scheme” to get rid of his DOGE holdings. Musk has long been a vocal supporter of Dogecoin, often tweeting about the cryptocurrency even before the start of the 2020 bull run.
Earlier in March 2022, Elon Musk, announced on Twitter (NYSE:TWTR) that his space exploration firm, SpaceX, will start taking Dogecoin (DOGE) as payment for its goods. Musk also disclosed that Tesla Motors (NASDAQ:TSLA) would accept merchandise payments in DOGE.
The complaint also compiled comments from Warren Buffett, Bill Gates, and other influential people who doubt the validity of cryptocurrencies. Since the currency has no inherent value, according to Johnson, then it is comparable to a pyramid scheme.
However, the crypto community has ridiculed the lawsuit. Dogecoin creator Shibetoshi Nakamoto, a Tweet of whose was cited in the lawsuit as supporting evidence, called the lawsuit “stupid as f*ck” on Twitter on Thursday, but admitted that crypto trading isn’t much different from gambling.
Dogecoin’s value has been on the decline over the past year, dropping to $.057 per coin Thursday, from a peak of $.64 last May. The cryptocurrency was created in 2013 as a joke but has since been embraced by Musk and other celebrities. At the time of writing, Dogecoin’s price is $0.057743 USD with a 24-hour trading volume of $672,859,771. The current CoinMarketCap ranking is #10, with a live market cap of $7,660,870,520.
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