Elon Musk faces a $258bn lawsuit for allegedly engaging in a crypto pyramid scheme
Elon Musk has been sued for $258bn by a Dogecoin investor for defrauding him through a “crypto pyramid scheme.”
Musk, along with his companies Tesla and SpaceX, appear in the lawsuit filed in federal court in Lower Manhattan on Thursday.
Keith Johnson, a Dogecoin investor, claims that Musk drove up the price of Dogecoin through promotional tweets and other social media for his “profit, exposure, and amusement.” In a lawsuit, Johnson accuses Dogecoin of being “simply a fraud” since it has no underlying value and argues that Musk’s support for this cryptocurrency was deceptive.
According to Johnson, Musk, who he calls the self-appointed Dogefather, gathered the “Doge Army” to increase Dogecoin’s trade value while being fully aware of his influence on the market cap. The army included Snoop Dogg and Mark Cuban.
Additionally, Johnson elaborates that Musk’s description of the Dogecoin blockchain technology was confusing, leading the plaintiff to believe that its value will rise while “it has no value at all.”
Currently, the price of one Dogecoin stands at 5.7 cents, while in May 2021, it averaged 74 cents.
“Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metal, or anything at all. You can’t eat it, grow it, or wear it… It’s simply a fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price,” the lawsuit says.
Johnson is seeking $86 billion in damages tripled for related financial losses incurred since 2019 and for Elon Musk and his companies to be banned from advertising Dogecoin. Additionally, he wishes for a judge to declare trading Dogecoin gambling.
During Musk’s appearance on Saturday Night Live, he called Dogecoin “a hustle,” which caused the trade value to skyrocket and the price to plummet, according to the complaint.
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