by Mitchelle Uzorka
Elon Musk’s companies, SpaceX and Tesla have been sued for $258 billion by a certain Keith Johnson who claims that the companies and their owner illegally inflated the price of Dogecoin, (a cryptocurrency) by constituting an illegal racketeering enterprise.
The lawsuit read, “an American citizen was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme. The Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,”
He is asking for his motion, filed in a New York court, to be classified as a class-action suit on behalf of those who have suffered losses by investing in dogecoin since 2019.
Since Musk began promoting the virtual currency, investors have lost around $86 billion, Johnson estimates. He would like Musk to reimburse investors this sum, plus pay double that in damages — an additional $172 billion.
Founded in 2013, dogecoin’s creators say it was intended as an ironic response to two big internet phenomena: cryptocurrencies such as bitcoin, and a meme image of a Shiba Inu dog.
Johnson said he believes Musk increased “the price, market cap and trading volume of Dogecoin” through his promotion of it.
He included tweets from Musk, the world’s richest man who has more than 98 million followers on Twitter, including one promising that SpaceX would “put a literal Dogecoin on the literal moon.”
Johnson likened dogecoin to a pyramid scheme since the virtual currency has no intrinsic value nor is it a product. Additionally, it is not backed by a tangible asset and the number of “coins” is unlimited.
Suits by investors who feel cheated by the promises of virtual currency are on the rise in the United States.