Specifically, plaintiff Keith Johnson accused Musk, electric car company Tesla Inc (TSLA.O) and space tourism company SpaceX of racketeering for touting Dogecoin and driving up its price, only to then let the price tumble.
“Since Defendant Musk and his corporations began purchasing, developing, promoting, supporting, and operating Dogecoin in 2019, Plaintiff and the class have lost approximately $86 billion in this Crypto Pyramid Scheme.” According to the lawsuit, filed Thursday in U.S. federal court in New York.
“It’s simply a fraud whereby greater fools are deceived into buying the coin at a higher price,” reads the lawsuit.
Keith Johnson claims total damages of $258 billion, triple the amount lost. He also requires Musk and his companies to stop promoting Dogecoin and declares that trading Dogecoin is gambling under federal and New York law.
The complaint said Dogecoin’s selloff began around the time Musk hosted the NBC show “Saturday Night Live and, playing a fictitious financial expert on a “Weekend Update” segment, called Dogecoin “a hustle.”
The memecoin has fallen more than 92% from an all-time high of US$0.7376 a year ago. Musk and his companies have not yet responded to the lawsuit.
Elon Musk and Tesla officially stepped into the crypto space in February 2021. Tesla is currently maintaining a $1.3 billion investment in BTC even though it no longer supports the world’s largest cryptocurrency due to the “environmental issues” of Proof-of-Work mining. Musk himself has confirmed that he will maintain his BTC investment.
Tesla has applied DOGE payments for some of its products since January 2022, and SpaceX is about to follow that move.
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