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Elon Musk sued over alleged Dogecoin pyramid scheme

A Dogecoin investor filed a $258 billion lawsuit against Elon Musk on Thursday, accusing him of conducting a pyramid scheme to profit off the cryptocurrency.

In a lawsuit filed in federal court in Manhattan, the plaintiff Keith Johnson charged Musk, Tesla Inc (TSLA.O), and SpaceX with racketeering for promoting Dogecoin and raising its price before allowing it to fall.

The complaint said that “Defendants were aware that Dogecoin has no value since 2019 nevertheless marketed Dogecoin to profit from its trade.” In order to administer and exploit the Dogecoin Pyramid Scheme for profit, exposure, and entertainment, Musk leveraged his position as the richest man in the world.

The case also compiles remarks from Bill Gates, Warren Buffett, and others contesting the value of cryptocurrency.

Requests for comment from Tesla, SpaceX, and Musk’s attorney were not immediately fulfilled.

Requests for comment on the precise proof Johnson’s client has or anticipates having that shows Dogecoin is worthless and the defendants conducted a pyramid scheme were not immediately answered by Johnson’s attorney.

Johnson is requesting $86 billion in damages, which would treble the market value of Dogecoin since May 2021.

Additionally, he wants a judge to rule that trading Dogecoin is illegal under both federal and New York law and to stop Musk and his businesses from promoting the cryptocurrency.

According to the lawsuit, Dogecoin’s selloff started around the time Musk hosted the NBC program “Saturday Night Live” and referred to Dogecoin as “a hustle” while posing as a bogus financial expert during a skit called “Weekend Update.”

In February 2021, Tesla said that it had purchased $1.5 billion worth of bitcoin and had briefly accepted it as payment for cars.

Dogecoin’s price dropped from its peak of almost 74 cents in May 2021 to roughly 5.8 cents on Thursday.

Johnson v. Musk et al., Southern District of New York U.S. District Court, Case No. 22-05037

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