Tesla CEO Elon Musk has been sued for $258 billion for allegedly running a pyramid scheme to support Dogecoin, Cryptocurrency which has recently gained popularity among investors. The lawsuit was filed by a Dogecoin investor who has also sued Musk Tesla and SpaceX. Musk is also the CEO of SpaceX. This comes in the form of Dogecoin Last year it suddenly gained immense popularity when Elon Musk He said he would accept cryptocurrency as payment for Tesla cars.
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 extortion for promoting Dogecoin and raising its price, only to let the price go down, according to reports.
Keith Johnson, who said he lost money after investing in Dogecoin, described himself as a “scammed US citizen” in what he referred to as a “Dogecoin crypto pyramid scheme.”
“The defendants have known since 2019 that Dogecoin is of no value after Dogecoin has been promoted for profit from its trading,” the complaint reads. “Musk has used his base as the world’s richest man to operate and manipulate the Dogecoin pyramid system for profit, exposure and amusement,” she added.
Johnson, who in his complaint referred to comments by Warren Buffett, Bill Gates and others questioning the value of cryptocurrency, requested that his proposal be classed as a class action. He said the lawsuit is being brought on behalf of those who have incurred losses by investing in Dogecoin since 2019.
In his complaint, the plaintiff stated that the Dogecoin sale began around the time Elon Musk came in as host of Saturday Night Live, playing a fictitious financial expert on the Weekend Update segment, calling Dogecoin a “hustle.” Dogecoin, which was originally created as a fun cryptocurrency intended only for light-hearted investors and categorized within memecoins, gained huge popularity after Musk’s support.
Johnson’s attorney did not immediately respond to requests for comment on the specific evidence his client possesses or expects to obtain that proves Dogecoin is worthless and that the defendants operate a pyramid scheme.
Since Musk began promoting the virtual currency, investors have lost about $86 billion, Johnson estimates. Musk would like to compensate investors for that amount, in addition to paying double that amount in compensation — an additional $172 billion. He also wants to prevent Musk and his companies from promoting Dogecoin and a judge declaring Dogecoin trading to be gambling under federal and New York law.
Johnson likened Dogecoin to a pyramid scheme because virtual currency has neither intrinsic value nor a product. In addition, they are not backed by a tangible asset and the number of “coins” is unlimited.
Johnson said he believes that Musk has increased the “price, market capitalization and trading volume of Dogecoin” by promoting it. It included tweets from Musk, the world’s richest man with more than 98 million followers on Twitter, including one that promised SpaceX would “literally put Dogecoin on the real moon.”
Dogecoin price was trading at $0.05606 on Friday, June 17 at 0944 IST, down more than 7 percent in the past 24 hours, according to data from CoinMarketCap.
(With input from Reuters and AFP)