Cryptocurrency

Elon Musk, SpaceX, Tesla are sued $258 billion for DOGE Pyramid Scheme

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Elon Musk, SpaceX, and Tesla were sued in federal court on Thursday for allegedly “manipulating” the price of Dogecoin through a deliberate “crypto pyramid scheme” conducted via Twitter.

Information

Plaintiff Keith Johnson, who purchased Dogecoin in 2021, is suing Musk and his companies SpaceX and Tesla in the Southern District of New York for at least $86 billion in damages.

Johnson claims Musk’s tweets about Dogecoin drove up its price, but the currency lacks “underlying value” and Musk promoted it for his own “profit, exposure, and amusement.”

Under federal and New York law, Johnson is also seeking court orders prohibiting Musk from promoting Dogecoin and declaring Dogecoin trading a form of gambling.

According to the lawsuit, Dogecoin is a “illegal wire fraud enterprise” fueled by Twitter promotion and manipulation.

Key Background

Dogecoin’s value has fallen over the last year, falling to $.057 per coin on Thursday from a high of $.64 last May. The cryptocurrency was launched in 2013 at a price of $.0002 per coin. Musk began promoting Dogecoin in 2019 with a series of tweets containing the words “DOGE” and “Tesla merch buyable with Dogecoin,” both of which increased the value of the Dogecoin. Musk reversed his support in February 2021, tweeting, “I will literally pay actual $” to people who void their Dogecoin accounts.

The US Securities and Exchange Commission launched an investigation into Musk that month for his Dogecoin-related tweets. “Doge will live forever,” Musk later tweeted. Musk has continued to support, or at the very least mention, Dogecoin on Twitter and in a May 2021 episode of Saturday Night Live.

Quote

According to the lawsuit, Dogecoin is a “fraud in which ‘greater fools’ are duped into purchasing the coin at a higher price.”

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