Elon Musk. photo: Shutterstock

Elon Musk and his companies Tesla and SpaceX have become defendants in a $258 billion lawsuit over allegations they are part of a pyramid scheme to support the meme cryptocurrency Dogecoin.

Keith Johnson, an American citizen who was allegedly defrauded of money by the defendants’ Dogecoin pyramid scheme, sued Musk and his companies, alleging that they constitute an illegal extortion company to inflate the price of Dogecoin.

“Defendants falsely and misleadingly claim that Dogecoin is a legitimate investment when it is worthless,” Johnson said in his complaint, filed Thursday in federal court in Manhattan.

Johnson is seeking to represent a class of people who have lost money trading in Dogecoin since April 2019. He is seeking $86 billion in damages, in addition to triple damages of $172 billion, as well as an order barring Musk and the companies from promoting Dogecoin, and declaring that trading Dogecoin constitutes gambling under US and New York law.

Musk was contacted by Bloomberg but did not immediately respond to emails asking for comment on the lawsuit. Representatives for SpaceX and Tesla, and Tesla’s legal counsel, also did not immediately respond.

Dogecoin is trading this Thursday (16) at around 5 cents and has dropped about 82% in the last 365 days, according to Coingolive. The digital currency rose to 74 cents last year before giving back those gains.

The case is “Johnson v. Musk, 22-cv-05037, US District Court, Southern District of New York (Manhattan)”.

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