Crypto

Musk Sued for $258bn Over Dogecoin ‘Pyramid Scheme’

 

An investor in the Dogecoin cryptocurrency has sued Elon Musk for $258 billion, alleging that the Tesla chief executive ran a pyramid scheme to support the digital asset, which has lost more than 80% of its value over the past year.

Keith Johnson accused Musk, electric car company Tesla and space tourism company SpaceX of racketeering by touting Dogecoin and driving up its price, only to then let the price tumble.

“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said.

Tesla, SpaceX and a lawyer for Musk did not immediately respond to requests for comment. Musk is chief executive of both Tesla and SpaceX.

“Musk used his pedestal as world’s richest man to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and amusement.”

The complaint also includes comments from Warren Buffett, Bill Gates and others questioning the value of cryptocurrency.

ALSO SEE: Elon Musk’s Order for Tesla Job Cuts Hits Singapore, India

 

 

Specific Evidence is Not Known

A lawyer for Johnson did not immediately respond to requests for comment on what specific evidence his client has or expects to have that proves Dogecoin is worthless and the defendants ran a pyramid scheme.

Johnson is seeking $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled.

Musk has intermittently posted on social media in favour of Dogecoin, writing as recently as May 12: “It has potential as a currency.”

He also allowed Dogecoin as a form of payment at Tesla’s supercharging stations and in its online store.

Last November, Musk criticised Binance boss Changpeng Zhao on Twitter after the cryptocurrency exchange limited withdrawals of Dogecoin.

Dogecoin was launched in 2013 by two software engineers, Jackson Palmer in Sydney and Billy Markus in Portland. It started as a joke based on a popular meme featuring a Shiba Inu dog.

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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