Elon Musk and his companies were accused of running Dogecoin crypto pyramid scheme

A US citizen has sued the entrepreneur, Tesla, and SpaceX for $258 billion

17.06.2022 - 07:20

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2 min

What’s new? US citizen Keith Johnson has sued Elon Musk, as well as the companies he leads, Tesla and SpaceX, claiming that they implemented illegal financial schemes to manipulate the rate of the meme cryptocurrency Dogecoin (DOGE). Johnson is seeking $86 billion in damages from Musk and $172 billion in moral damages, Bloomberg reports. He has also asked the court for a complete ban on the promotion of DOGE for the billionaire and his companies.

Bloomberg’s material

What else is known about the charges? The plaintiff is also seeking recognition of Dogecoin trading as gambling under New York State and US law.

“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” the lawsuit says.

Musk and the lawyers of his companies have not yet commented on the incident in any way.

The entrepreneur has repeatedly advocated for Dogecoin, causing sharp fluctuations in the coin’s rate. In December 2021, he stated that DOGE is better for everyday payments than BTC. In May, Musk reported that SpaceX would begin accepting Dogecoin as payment for merch. In this, Tesla had already started accepting the meme cryptocurrency.

As of June 17, 07:15 UCT, Dogecoin is trading at $0,058, down in price by 3% in 24 hours, according to Binance.

Earlier, CryptoLaw chief and lawyer John Deaton warned Elon Musk about the possible consequences of the Dogecoin promotion. He suggested that the US Securities and Exchange Commission (SEC) may recognize the asset as security and link it to Tesla and SpaceX.

Economist and author Nassim Taleb said that the lack of clear rules regulating the digital assets market provides opportunities for civil lawsuits, which is a “gold mine for lawyers.”

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