Dogecoin (DOGE-USD) is in full focus after an individual has sued Tesla (NASDAQ:TSLA), SpaceX, and Elon Musk for $258 billion. The accuser, Keith Johnson, was allegedly defrauded out of money by the defendant’s “Dogecoin Crypto Pyramid Scheme.” He claims that Musk and his two companies are an illegal racketeering enterprise that seeks to inflate the price of Dogecoin.
Dogecoin operates as an open-source, peer-to-peer cryptocurrency that was created in 2013 by Billy Markus and Jackson Palmer. The dog-themed coin has humorous origins and was originally created as a joke.
Musk has been an adamant supporter of the crypto, often tweeting positive insights about it. The Tesla Shop even accepts Dogecoin for certain items on the Tesla website. SpaceX is expected to accept the currency as payment soon.
Last year, the price for the coin peaked at a high of 73 cents. This was around the same time that Musk appeared on Saturday Night Live to discuss the crypto. Today, the price trades in the 5 cents range.
With that in mind, let’s get into the details of the Dogecoin pyramid scheme lawsuit.
Musk, Tesla, SpaceX, and the “Dogecoin Pyramid Scheme” Lawsuit
- The lawsuit was filed in a Manhattan court.
- Johnson claims that the “Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.”
- Furthermore, Johnson seeks to represent a class of people who have lost money on Dogecoin since April of 2019.
- He seeks damages of $86 billion, as well as triple damages of $172 billion.
- In addition, Johnson wants an order that would block Musk and any Musk-related companies from promoting Dogecoin.
- He also wants trading of the crypto to be labeled as gambling under U.S. and New York law.
- The lawsuit alleges that Dogecoin is not a currency, stock, or security. It isn’t backed by anything to support its price either.
- The filing continues to characterize the crypto as “simply a fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price.”
- Additionally, the filing notes that Musk used his billionaire status to manipulate Dogecoin for his own selfish reasons.
- Musk and representatives of Tesla and SpaceX did not respond right away to Bloomberg’s request for comments.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.