Elon Musk was hit with a $258 billion lawsuit that alleges the tech mogul and his high-profile firms “are engaged in a crypto pyramid scheme by the use of dogecoin cryptocurrency.”
In federal courtroom papers filed in Decrease Manhattan, the plaintiff, Keith Johnson, names Musk in addition to his electrical automobile firm, Tesla, and the area tourism agency SpaceX.
Johnson, a US citizen, needs $86 billion in damages, plus tripled damages of $172 billion for losses incurred from buying and selling dogecoin since 2019. He’s searching for to characterize a category of people that have misplaced cash investing in dogecoin.
The lawsuit additionally calls for that Musk, Tesla and SpaceX stop selling dogecoin.
On Thursday, one dogecoin was price simply north of 6 cents — nicely off its all-time excessive of 74 cents in Might 2021.
“Dogecoin is just not a forex, inventory, or safety. It’s not backed by gold, different valuable steel, or something in any respect. You may’t eat it, develop it, or put on it,” in line with the courtroom submitting.
The lawsuit continues: “It doesn’t pay curiosity or dividend. It has no distinctive utility in comparison with different cryptocurrencies…It’s not secured by a authorities or non-public entity.”
“It’s merely a fraud whereby ‘higher fools’ are deceived into shopping for the coin at a better value.”
Musk, the world’s richest particular person whose net worth was valued by Forbes at $202.9 billion, has not responded to the lawsuit.
Earlier this yr, Musk revealed that Tesla had begun accepting dogecoin for transactions in its on-line retailer. SpaceX is expected to follow suit within the close to future.
The announcement despatched the worth of dogecoin surging.
Tesla additionally spent $1.5 billion on bitcoin in February 2021 – a transfer the electrical automobile marker stated would offer “extra flexibility to additional diversify and maximize returns on our money.”
On the time of the disclosure, the worth of bitcoin was hovering within the $30,000 to $40,000 vary.
Musk this week broke his silence on the current collapse in digital asset costs — and responded to a meme revealing the following sector of the financial system he expects to plunge.
Musk reacted to the steep selloff in bitcoin, the biggest cryptocurrency by market cap, which briefly plunged under $21,000 — its lowest stage since December 2020.
“Cryptonight,” Musk tweeted Tuesday evening.
Musk additionally replied to a meme posted by dogecoin co-creator Billy Markus.
The cartoon picture confirmed the grim reaper approaching a door labeled “actual property” after beforehand making grisly stops in rooms labeled “shares” and “cryptocurrency.”
“True,” Musk stated in response to the put up.
The billionaire has repeatedly touted investments in cryptocurrencies in recent times. In March, he declared that he “won’t sell” his holdings in bitcoin, Ethereum and Dogecoin regardless of rising inflation and financial uncertainty that has led many buyers to promote riskier asserts.
The world’s richest man has by no means disclosed how a lot of his wealth is tied to crypto.
Dogecoin was buying and selling 4.79% greater on Thursday afternoon whereas different well-known cryptocurrencies like bitcoin have been buying and selling decrease.
Bitcoin fell 1.07% to $21,062.88. Ethereum rose 0.53% to $1,113.69, in line with Coinbase data.
