Summary: Elon Musk, SpaceX, and Tesla were sued in federal court Thursday over claims that Musk directly “manipulated” the price of DOGE in a deliberate “crypto pyramid scheme.”  Keith Johnson, the plaintiff, purchased Dogecoin in 2021. He is seeking a class-action lawsuit in the Southern District of New York against Musk and his companies, SpaceX and ...

Elon Musk, SpaceX, and Tesla were sued in federal court Thursday over claims that Musk directly “manipulated” the price of DOGE in a deliberate “crypto pyramid scheme.” 

Keith Johnson, the plaintiff, purchased Dogecoin in 2021. He is seeking a class-action lawsuit in the Southern District of New York against Musk and his companies, SpaceX and Tesla, for over $85 billion in damages plus tripled damages of $172 billion for losses incurred from trading Dogecoin since 2019. He is attempting to represent a large class of investors who have lost money in Dogecoin.

Johnson argues that Musk drove up the price of Dogecoin with his tweets about it but that the cryptocurrency lacks any “underlying value,” Musk promoted it for his own “profit, exposure, and amusement.”

Musk started promoting Dogecoin in 2019 with tweets that included “DOGE” and “Tesla merch buyable with Dogecoin,” both of which increased the Dogecoin’s value. Over that time, the price rose from approximately $0.002 to over $0.60, a 30,000% gain. 

The suit states that Dogecoin is “fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price.”  The lawsuit continued by saying, “Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metal, or anything at all. You can’t eat it, grow it, or wear it.”  The lawsuit continues, saying, “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.”

The billionaire has repeatedly stated that he has invested in cryptocurrencies. Last March, he said that he “won’t sell” his holdings in BTC, ETH, and DOGE in spite of unfavorable market conditions for crypto investors. Musk, the world’s richest man, still has not disclosed how much of his $206 Billion is tied to cryptos like DOGE.

Author: Garrett Meifert