Billionaire Elon Musk has been hit with a $258 billion lawsuit for allegedly engaging in a crypto pyramid scheme “Dogecoin cryptocurrency”. The lawsuit was filed by in a federal court in Lower Manhattan by US Citizen Keith Johnson against Elon Musk and his businesses Tesla and Space X.
Johnson wants $86 billion in damages plus another $172 billion for losses incurred from trading dogecoin since 2019. Johnson says, he represents a class of people who have lost money investing in dogecoin.
The complainant alleges that Musk’s tweets and public messaging drove a significant price spike in Doge and encouraged people to invest. Activities the complainant says defrauded him and other investors into a pump and dump scheme. Apart from using it for customer experience, Musk’s consistent messaging on cryptocurrency directly led to its price spike and when market conditions changed, investors lost out.
Johnson said, “Every statement and endorsement from Defendants on social media regarding Dogecoin has knowingly caused millions of people to spend billions of dollars buying into the Dogecoin Crypto Pyramid Scheme,”
This is not the first time Musk has been accused of hyping Dogecoin. In 2021, for instance, Elon tweeted “Dogecoin is the peoples crypto”, in a separate tweet he added “No highs, no lows” a tweet that saw Dogecoin rise to about 37 per cent after minutes of tweeting.
Must later removed bitcoin from his Twitter bio just weeks after adding it. The Block publication also highlights how aMusk has a long history promoting Dogecoin and the complaint highlights the greatest hits of Musk’s Doge tweets since a satirical article piqued his interest in the meme coin in 2019. The complaint points out that Dogecoin grew in value following Musk’s tweets about it in 2019, which led Musk to self-appoint himself the “CEO of Dogecoin.”
The complaint also highlights that Musk engaged with Dogecoin developers and prompted the community to take action, though he would later point out that the Doge community is not a formal organization and no one reports to him as a leader, so his ability to take action in the community was limited the publication added.
The lawsuit further demands that Musk and his businesses cease to promote dogecoin.