Elon Musk is being sued for $258 billion for allegedly running a pyramid scheme to promote the cryptocurrency Dogecoin.
Keith Johnson, a Dogecoin investor who claims he lost money after investing in the cryptocurrency, accused Musk, his electric vehicle firm Tesla, and space tourism company Space X of racketeering for promoting Dogecoin and pushing up its price, only to see it plummet.
Johnson represented himself as an “American citizen” who had been “defrauded” by a “Dogecoin Crypto Pyramid Scheme.”
He is requesting that his application, which was filed in a New York court, be classed as a class action complaint on behalf of anyone who have lost money investing in dogecoin since the beginning of 2019.
According to Johnson, investors have lost about $86 billion since Musk began pushing the virtual currency. He wants Musk to pay back the money to investors, as well as an extra $172 billion in damages.
Johnson also wants a judge to rule that trading Dogecoin constitutes gambling under federal and New York law, and to stop Musk and his firms from promoting it.
Dogecoin was created in 2013 as a satirical reaction to two major online phenomena: cryptocurrencies such as bitcoin and a meme picture of a Shiba Inu dog, according to its developers.
For the most of its existence, the price of dogecoin was merely fractions of a penny.
However, it enjoyed a significant increase in value at the start of 2021, climbing to $0.73 in May of that year during a purchasing frenzy sparked by the GameStop scandal and Musk’s amusing tweets about it.
It was, however, only worth less than six cents on Thursday.
According to Johnson, Musk’s advocacy of Dogecoin improved its “price, market value, and trading volume.”
Johnson highlighted comments from Musk, the world’s richest billionaire with over 98 million Twitter followers, including one promising to ‘place a literal Dogecoin on the literal moon.’
‘Defendants knew Dogecoin had no value since 2019 yet marketed Dogecoin to benefit from its trade,’ according to the complaint.
‘Musk exploited his position as the World’s Richest Man to profit from, expose, and entertain himself by operating and manipulating the Dogecoin Pyramid Scheme.’
Because it takes dogecoin as payment for some derivative items, Johnson identified Musk’s Tesla electric automaker in the action. SpaceX was also featured since one of its satellites was named after the cryptocurrency dogecoin.
Because dogecoin has no inherent value and is not a commodity, Johnson compared it to a pyramid scam. It’s also not backed by anything physical, and the quantity of ‘coins’ is limitless.
In the United States, lawsuits by investors who believe they have been duped by the promises of virtual money are on the rise.
Requests for comment from Tesla, SpaceX, and Musk’s lawyer were not immediately returned.
Johnson’s lawyer did not reply to inquiries for comment on what particular proof his client has or expects to have that indicates Dogecoin is worthless and the defendants conducted a pyramid scheme.
On Thursday, a Tesla shareholder sued Musk and the company’s board of directors, accusing them of disregarding employee concerns of racism and sexual harassment.
Plaintiff Solomon Chau filed the case in Texas, where Tesla is located, on Thursday, claiming that the company’s unresolved ‘toxic working culture’ has caused ‘irreparable’ reputational and financial loss.
The case was the latest against Tesla, which has been slammed by a slew of sexual harassment lawsuits and claims of widespread racism from Black employees.
Tesla was sued by the state of California in February for claimed discrimination and harassment against Black employees at its Fremont facility outside San Francisco, alleging that the corporation had established a “racially divided workplace” in a lawsuit.
A ‘toxic atmosphere took shape internally for years, and the truth about Tesla’s culture has just lately surfaced, leading to measures by both regulators and private persons,’ according to the court filing on Thursday.
According to the complaint, Musk, Tesla’s executive director, and the company’s 11 board members ignored various “red lights,” resulting in the departure of numerous highly competent personnel and the initiation of a series of costly legal processes.
According to the complaint, “these wrongs caused considerable damage to Tesla’s image, goodwill, and standing in the business community” and “exposed Tesla to hundreds of millions of dollars in possible liability for breaches of state and federal law.”
Tesla was forced to pay $137 million plus interest to a former elevator operator at its Fremont facility in another case last year for turning a blind eye to bigotry. The fine was cut to $15 million earlier this year.
Other legal actions are being pursued, particularly by Black female employees who claim to have been victims of racial insults and unwanted sexual remarks by coworkers or supervisors.
Tesla hasn’t responded to a request from AFP since late 2020, when it seldom responded to queries from media.