Keith Johnson, an investor in Dogecoin, has sued Elon Musk for $258 billion, accusing the Tesla and SpaceX CEO of running a pyramid scheme to promote the cryptocurrency. In a complaint filed in the federal court of Manhattan, the plaintiff has blamed the billionaire and his flagship companies Tesla and SpaceX for touting the virtual currency and driving up its prices, only to let them tumble.
Johnson wants his plea to be treated as a class action suit on behalf of those who suffered tremendous losses by investing in Dogecoin since 2019. He compared it to a pyramid scheme as the virtual currency has no intrinsic value nor is it a product. Moreover, it is not backed by a tangible asset and the number of coins is unlimited.
The plaintiff says that since the time Musk began promoting Dogecoin, investors have lost around $86 billion. He wants Musk to reimburse investors this sum, plus pay double the amount in damages – an additional $172 billion. He also wishes 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.
Founded in 2013, the Dogecoin came into being as an emblematic response to two big internet phenomena: cryptocurrencies like bitcoin and a meme image of a Shiba Inu dog. The price of Dogecoin traded at just fractions of a cent for most of its existence, before Musk started mentioning it in his tweets. The value of the crypto asset suddenly rose to about 75 cents but is now trading for less than 6 cents. Investors have suffered substantial losses of over 90% of their investment, thanks to Musk. His lawyer, Tesla and SpaceX have not responded to requests for comments yet.