Elon Musk is being sued for $258 billion U.S. by a Dogecoin (DOGE) investor who accuses him of running a “pyramid scheme” to support the nascent cryptocurrency.
In a complaint filed in federal court in New York City, plaintiff Keith Johnson accuses Musk, electric car company Tesla (TSLA), and privately held SpaceX of “racketeering” for promoting Dogecoin and driving up its price, only to then let the price collapse.
Musk is the chief executive officer (CEO) of both Tesla and SpaceX.
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint alleges.
The case known as “Johnson v. Musk et al” also includes comments from business leaders Warren Buffett and Bill Gates who have publicly criticized cryptocurrencies and questioned their value.
Keith Johnson is seeking $86 billion U.S. in damages, which mirrors the decline in Dogecoin's market value since May 2021, and then says he wants that amount tripled.
Johnson also wants to block Musk and his companies from promoting Dogecoin in the future, and for a judge to declare that trading Dogecoin is gambling under federal and New York State laws.
The complaint said Dogecoin's selloff began around the time that Musk hosted Saturday Night Live in spring 2021 and said on the show that Dogecoin is “a hustle.”
Musk also publicly referred to himself as the “Dogefather” and issued multiple tweets promoting Dogecoin as part of a campaign to try and drive the digital token’s price up to $1 U.S.
Dogecoin currently trades at less than $0.06 U.S., down from an all-time high of $0.74 U.S. reached in May 2021.
