“The world’s richest man (Musk) operates, manipulates pyramid scheme for profit, expose & amusement.”
A Dogecoin investor sued Elon Musk for $258 billion, accusing him of running a pyramid scheme to support the cryptocurrency.
Plaintiff Keith Johnson filed a case in federal court in Manhattan accusing Musk, electric vehicle firm Tesla Inc (TSLA.O), and space tourism company SpaceX of racketeering for promoting Dogecoin and driving up its price, only to see it plummet.
Musk is the founder and CEO of both Tesla and SpaceX.
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
The complaint also aggregates comments from Warren Buffett, Bill Gates and others questioning the value of cryptocurrency.
No Comment From Musk
Tesla, SpaceX and a lawyer for Musk did not immediately respond to requests for comment.
A lawyer for Johnson did not immediately respond to requests for comment on what specific evidence his client has or expects to have that proves Dogecoin is worthless and the defendants ran a pyramid scheme.
Johnson is seeking $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled.
He also wants to block Musk and his companies from promoting Dogecoin and a judge to declare that trading Dogecoin is gambling under federal and New York law.
The complaint said Dogecoin’s sell-off began around the time Musk hosted the NBC show “Saturday Night Live and, playing a fictitious financial expert on a “Weekend Update” segment, called Dogecoin “a hustle.”
Tesla in February 2021 said it had bought $1.5 billion of bitcoin and for a short time accepted it as payment for vehicles.
Dogecoin traded at about 5.8 cents on Thursday, down from its May 2021 peak of about 74 cents.
The case is Johnson v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037. – Reuters.