Elon Musk Faces $258 Billion Lawsuit For ‘Dogecoin Pyramid Scheme’

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Billionaire and SpaceX and Tesla CEO Elon Musk is set to face a $258 billion lawsuit that alleges him of running a pyramid scheme with the meme crypto coin Dogecoin (DOGE).

Keith Johnson, the petitioner, identifies Musk along with his electric car firm, Tesla, and the space tourism enterprise SpaceX in federal court papers presented in Lower Manhattan, United States. The lawsuit claims that Musk and his firms “are engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency.”

The petitioner seeks $86 billion in damages and an additional $172 billion for the losses incurred for trading dogecoin from 2019. Through the lawsuit, Johnson says he also represents various other investors who have lost their money in dogecoin.

Moreover, the lawsuit calls for Elon Musk, Tesla, and SpaceX to stop promoting the said cryptocurrency. He also seeks to declare dogecoin trading as a form of gambling, under federal and New York law.

“Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metals, or anything at all. You can’t eat it, grow it, or wear it… It doesn’t pay interest or dividend. It has no unique utility compared to other cryptocurrencies…It’s not secured by a government or private entity.” –Keith Johnson

Further, Johnson attests that Musk drove up the price of Dogecoin with his tweets about it, promoting it for his own “profit, exposure, and amusement.”

As of writing, Musk has not yet responded to Johnson’s lawsuit. 

In December 2020, Tesla started accepting DOGE for its merch and announced that SpaceX might soon follow the same. The announcement of Dogecoin integration in Tesla has made the value increase as much as 33% but has now gone back to a lower value.

At the time of writing, Dogecoin is trading at $0.056574 with a 24-hour trading volume of $626,474,305. It is a decrease of 69.4% since the Tesla Dogecoin inclusion. The pumping of Dogecoin for a short period of time due to Elon Musk’s tweet has been a recurring scenario. 

As early as 2018, Musk has been in crypto space revealing he has a few bitcoins. In February last year, Tesla invested $1.5 billion worth of Bitcoin under a new investment policy that would allow them to acquire and hold digital assets from time to time and in the long term. (Read more: Elon Musk’s Tesla Invests $1.5 B in Bitcoin)

Recently, Musk expressed that it is logical and it “makes sense” to utilize and integrate digital payments into Twitter.

“It would make sense to integrate payments into Twitter so it’s easy to send money back and forth,” he said in a virtual all-hands meeting for Twitter. 

This article is published on BitPinas: Elon Musk Faces $258 Billion Lawsuit Accusing Him Of Dogecoin Pyramid Scheme

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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