Billionaire CEO Elon Musk has been sued for $258 billion by a disgruntled investor over alleged claims of running a pyramid scheme for Dogecoin.
DOGE Love Or “Pyramid Scheme”?
Elon Musk has been quite open about his love for Dogecoin, often choosing to post positive tweets about the meme cryptocurrency. He had even schooled crypto exchange Binance over a glitch that affected DOGE holders. However, a DOGE investor believes that in light of the coin not performing as well recently, Musk’s favoritism for the coin was allegedly a carefully constructed pyramid scheme. Plaintiff Keith Johnson filed the complaint against Musk in the Manhattan federal court that named Musk’s companies - Tesla and SpaceX. The crypto was initially created as a “memecoin” meant only for light-hearted investments. However, Musk’s backing had shot its popularity through the roof, leading to its heightened demand among investors.
On separate occasions, Musk had announced that both his companies would be accepting DOGE payments. However, the coin first experienced a sharp spike of increased popularity last year when Musk tweeted that he would accept the crypto as payment for Tesla cars. According to Johnson’s complaint, this was a case of racketeering through false claims that drove up the price of DOGE, only to let it tumble. Johnson also claims that he was defrauded as he had invested in the crypto after believing in the “Dogecoin Crypto Pyramid Scheme” and had lost money.
An excerpt from the complaint reads,
“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 Demands Double In Damages
Johnson has claimed that he is filing the lawsuit on behalf of other investors who have lost money after investing in Dogecoin since Musk’s advocacy. He has also requested that the motion be classified as a class-action lawsuit. Johnson also estimates that since Musk promoted the crypto, investors have lost around $86 billion. The lawsuit demands complete reimbursement of this amount and an additional $172 billion in damages. Furthermore, the lawsuit also seeks to block Musk and his companies from promoting DOGE. In Johnson’s words, the coin is akin to a pyramid scheme since it is neither a product nor does it hold any intrinsic value.
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