Why has Elon Musk been sued after Dogecoin ‘pyramid scheme’ accusations?
A cryptocurrency investor has filed a lawsuit against the Tesla CEO demanding $258 billion in damages and that Dogecoin trading is reclassified as gambling.
The world’s richest man, Elon Musk, was sued for $258 billion on Thursday after a Dogecoin investor accused him of manipulating the price of the cryptocurrency and running a “pyramid scheme” to boost its value.
Plaintiff Keith Johnson filed the complaint in a federal court in Manhattan, accusing the Tesla CEO of racketeering. Johnson described himself as “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme.”
The complaint continues: “Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.”
Musk’s team are yet to respond to requests for comment.
Why has Elon Musk been sued for $258 billion?
The lawsuit is written to represent the people who have lost money while trading Dogecoin since April 2019. The exact numerical figure on the lawsuit comes from Johnson’s claim for $86 billion in damages, which his lawsuits requests be tripled.
Musk’s personal wealth is enormous with controlling stakes in Tesla, SpaceX and a recent attempts to purchase Twitter in an audacious $44 billion bid. Earlier this week Musk become the only person in the world with an estimated fortune of more than $200 billion, but that had fallen to around $197 billion at the time of the Dogecoin lawsuit.
The complaint filed by Johnson also calls for Musk and the companies cited in the lawsuit to be banned from promoting Dogecoin in the future. There is also a request for Dogecoin trading to be reclassified as gambling under both New York and United States law.
How much is Dogecoin worth now?
The fortunes (both literal and figurative) of Dogecoin and Elon Musk have been intertwined for some time, with the investor a major proponent of so-called ‘meme stocks’ during the cryptocurrency boom during the pandemic.
Musk’s enormous public profile and huge online following served as an invaluable publicist for the coin but his erratic behaviour has provoked huge swings in its value.
This was never more pronounced than when Musk appeared on Saturday Night Live to present the opening monologue, in which he said he was going to buy his mum Dogecoin for Mother’s Day. This was expected to create a new wave of interest but his appearance backfired later in the show when he quipped that Dogecoin was “a hustle.”
Since that moment the price of the coin has fallen off a cliff, losing 93% of its value. It is this type of involvement on Musk’s part that has spawned today’s lawsuit.