Elon Musk was hit with a $258 billion lawsuit that alleges the tech mogul and his high-profile companies “are engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency.”
In federal court papers filed in Lower Manhattan, the plaintiff, Keith Johnson, names Musk as well as his electric car company, Tesla, and the space tourism firm SpaceX.
Johnson, a US citizen, wants $86 billion in damages, plus tripled damages of $172 billion for losses incurred from trading dogecoin since 2019. He is seeking to represent a class of people who have lost money investing in dogecoin.
The lawsuit also demands that Musk, Tesla and SpaceX cease promoting dogecoin.
“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 said Dogecoin’s selloff 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.”
Musk’s tweets on Dogecoin, including one where he called it the “people’s crypto” generated a massive amount of interest in it.
The token’s price surged by about 4,000 per cent in 2021.
On Thursday, Dogecoin traded at about $0.058 (€0.047), compared to a May 2021 peak of about $0.74 (€0.70).
In February 2021, Tesla said it had bought $1.5 billion (€1.43 billion) of Bitcoin and for a short time accepted it as payment for vehicles.
Earlier this year, Musk said the electric carmaker would also accept Dogecoin as payment, tweeting: “Tesla merch buyable with Dogecoin”.
Musk recently replied to a meme posted by dogecoin co-creator Billy Markus.
The cartoon image showed the grim reaper approaching a door labeled “real estate” after previously making grisly stops in rooms labeled “stocks” and “cryptocurrency.”
“True,” Musk said in response to the post.