Elon Musk sued for $258bn over dogecoin ‘pyramid scheme’

Elon Musk sued for $258bn over dogecoin 'pyramid scheme'

According to reports, Elon Musk, Tesla and Space X are being sued for $258 billion, with allegations that him and his high-profile companies “are engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency.”

Keith Johnson, an American citizen, claims DOGE is a “fraud that fools the great fools.”

Background

Elon Musk is known on the internet as the ‘Dogefather’. His tweets and actions have caused spikes in price of the coin in the past, all to the frenzy of the doge community. But, Keith Johnson is accusing Musk for ‘inflating’ dogecoin with his tweets.

According to the complaint filed in a federal court in Manhattan on Thursday:

The defendants knew since 2019 that Dogecoin had no value and were still promoting Dogecoin to profit from their trade. Musk used the pedestal of himself as the richest man in the world to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and fun.

Keith Johnson

The demand by Johnson is under the argument of a “decrease in the market value of Dogecoin since May 2021.”

He argues his complaint with comments from the likes of Warren Buffet and Bill Gates who have questioned the value of cryptocurrencies recently. 

Johnson wants DOGE to declare itself as a ‘bet’ under the federal laws of New York. 

He accused Elon of promoting DOGE for his “own benefit, exposure, and amusement” and sought court orders to prevent the billionaire from promoting the meme cryptocurrency in the future.

Keith Johnson further argues that Dogecoin is an “illegal phishing company” that is fueled, promoted, and manipulated via Twitter. At press time, Elon Musk and his companies are yet to respond to the lawsuit filed against them. 

Elon Musk and Dogecoin 

Musk has been an adamant supporter of Dogecoin, often tweeting positive insights about it. He believes the memecoin would ultimately become the currency of the internet. His companies, Tesla and SpaceX have adopted dogecoin as a payment method for merchandise.

Musk previously disclosed that he personally holds Dogecoin. The cryptocurrency interestingly became popular after the tech mogul’s open support and endorsement last year, which caused a tremendous surge in price. 

In May last year, the price for the coin peaked at a high of 73 cents, at the same time that Musk appeared on Saturday Night Live to discuss and push the coin. Recently, the coin spiked considerably after he announced plans to acquire social media giant Twitter and take it private.

Elon Musk. Photo: Al Jazeera

However, despite loudly advocating for the coin, neither Musk nor his companies are known to have had any involvement in its development. 

Dogecoin operates as an open-source, peer-to-peer cryptocurrency and was created in 2013 as an internet joke popularly referred to as memecoin by software engineers – Billy Markus and Jackson Palmer. It was the first memecoin ever released, meaning that it purposefully had no use case and was advertised as such.

In this connection, Elon Musk is not liable for any incurred losses on DOGE and any other cryptocurrency investments.

There are two popular mantras in the cryptoverse – DYOR (Do Your Own Research) and NFA (Not a Financial Advise). Those two catchwords allude to the same thing – you’re responsible for the outcome of your actions and inactions in the crypto world. Perhaps, Keith Johnson didn’t pay considerable attention while investing.

Dogecoin market situation 

Profiting from Musk’s frequent push, DOGE soared as high as $0.73 in May last year. However, it has been on a downward spiral since then and is currently a shadow of its all-time high as the cryptowinter deepens.

Dogecoin has shredded a significant percentage of its value since the beginning of the year. According to data from Coinmarketcap at press time, DOGE is changing hands at $0.05, with a 27.09% decrease in the last 7 days, and down 92.21% from its record high of $0.73.


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