- Dogecoin investor demanded Musk to pay double that in damages — an additional $172 billion.
- In federal court in Manhattan, a formal lawsuit was filed.
- This lawsuit comes after Elon Musk met with Twitter employee ahead of his $44 billion takeover.
A $258 billion lawsuit was filed on Thursday against Elon Musk and his companies Tesla and SpaceX by a dogecoin investor. This comes after Elon Musk said last year that he would take Dogecoin as payment for Tesla cars, causing the cryptocurrency to skyrocket in popularity.
Keith Johnson, who claimed to have lost money after investing in dogecoin, referred to himself as an “American citizen” who had been “defrauded” by a “Dogecoin Crypto Pyramid Scheme.”
He is asking that his motion, which was filed in a New York court, be classified as a class-action suit on behalf of anyone who has lost money investing in dogecoin since 2019.
According to Johnson, since Musk began promoting the virtual currency, investors have lost nearly $86 billion. He wants Musk to pay back the money plus an additional $172 billion in damages to investors.
Dogecoin was created in 2013 as an ironic response to two major online phenomena: cryptocurrencies such as bitcoin and a meme image of a Shiba Inu dog.
For most of its existence, the price of dogecoin was just a fraction of a cent.
However, it enjoyed a significant increase in value at the start of 2021, climbing to $0.73 in May of that year amid a buying frenzy sparked by the GameStop saga and Musk’s humorous messages about it.
On Thursday, though, it was only worth less than six cents.
According to Johnson, Musk’s advocacy increased “the price, market value, and trading volume of Dogecoin.”
Musk, the world’s richest man, has more than 98 million Twitter followers, and one of his tweets claimed that SpaceX will “put a literal Dogecoin on the literal moon.”
Since it takes dogecoin as payment for some derivative products, Johnson cited Musk’s Tesla electric carmaker in the lawsuit. SpaceX was also included when one of its satellites was named after dogecoin.
Because dogecoin has no intrinsic value and is not a product, Johnson likened it to a pyramid scheme. It’s also not backed by a tangible asset, and the number of “coins” is limitless.
In the United States, lawsuits by investors who believe they have been duped by the promises of virtual currency are on the rise.