Elon Musk has been sued in a strange lawsuit for $258 billion by a Dogecoin investor who claims the Tesla and SpaceX frontman ran a pyramid scheme to support the cryptocurrency.
Dogecoin investor Keith Johnson said in a complaint filed in Manhattan federal court that Musk committed racketeering by driving Dogecoin’s price up, then letting it fall to levels significantly less than its all-time highs.
The complaint was seen by Reuters.
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint stated. Musk became vocally supportive of several cryptocurrencies last year, including Dogecoin and Bitcoin. Tesla even started accepting both of the cryptos for certain product purchases but backtracked from Bitcoin payments as the automaker recognized potential climate challenges that come from mining the coin.
However, Johnson claims Musk manipulated Dogecoin for his own pockets by promoting the crypto in the complaint. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.”
Johnson wants Musk to pay the $86 billion in damages from losses in Dogecoin’s value since May 2021 but wants the amount tripled. A judge will have to decide whether that is realistic. He is also seeking a potential provision that would restrict Musk or any of his companies from promoting Dogecoin. Additionally, Johnson would like a judge to declare that trading Dogecoin is gambling under federal and New York law.
Dogecoin spiked to record levels last May, reaching levels as high as $0.74 after being valued at a fraction of a penny just months prior. However, the biggest spike came just before Musk appeared on Saturday Night Live. When Musk appeared on the show, Dogecoin investors began to sell the crypto, causing the value to crash. The complaint claims that Musk’s fictional character on SNL called Dogecoin “a hustle,” which convinced investors to sell off the stock and made him lose $86 billion.
Johnson v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.
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