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Elon Musk and his two major companies are facing a lawsuit from an aggrieved Dogecoin investor who claims Musk cost him several billion dollars.
Elon Musk, alongside Tesla (NASDAQ: TSLA) and SpaceX, were served a massive $258 billion Dogecoin (DOGE) lawsuit, according to reports. This suit comes from an American citizen who claims to have lost money from trading DOGE, alleging that Musk is to blame. According to the class-action suit, filed Thursday in a federal court in Manhattan, Musk was behind an illegal racketeering scheme that inflated the price of Dogecoin. Allegedly, the pyramid scheme served to shill DOGE to drive up its value, only to let it plunge later.
In the complaint, plaintiff Keith Johnson said:
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
Plaintiff Seeking $86B, Triple Damage Amount in Elon Musk Dogecoin Lawsuit
Johnson is seeking $86 billion in damages, in addition to triple damages amounting to $172 billion. According to him, the $86 billion represents the amount lost by Dogecoin investors since Musk first started tweeting about it in 2019. Furthermore, the aggrieved Dogecoin investor wants to represent people who also lost money trading the meme digital currency, in addition to fighting for other investors. Johnson requested an order to block Musk and his companies from promoting Dogecoin. Johnson’s suit likens trading the meme crypto to gambling under US and New York law.
As of press time, a lawyer representing Johnson was yet to respond to requests for details of the lawsuit. The request seeks information about Johnson’s plan to prove the DOGE is worthless and that Musk ran a pyramid scheme.
Created in 2013 as a joke to poke fun at Bitcoin (BTC), Dogecoin ascended to meme status between 2020 and 2021. One factor touted as a significant reason for this jump is Elon Musk’s frequently posted Dogecoin praise on Twitter. The Tesla CEO’s comments concerning DOGE would frequently shill the meme crypto and pump its price. As it stands, Dogecoin is the 11th largest digital asset by market cap, with around $7.5 billion in value. In fact, at the height of its popularity, the dog-themed crypto sat on an overall market value of $88 billion. Put in perspective, that sum transcended the market cap of several companies listed on the S&P 500.
However, DOGE has cooled off substantially since its blazing hot streak. This has also been exacerbated by the pervading crypto sell-off in the past several weeks. The meme crypto tumbled from its high of nearly $0.74 to just over $0.05 in recent days. Factors causing the sell-off including US inflation and the war in Ukraine.
Although many believe DOGE has no real use, Musk has said that Tesla and SpaceX would soon support Dogecoin payments for products.