Elon Musk, Tesla, and SpaceX were sued for $258 billion by a Dogecoin investor who accused them of running a “pyramid scheme” to support the cryptocurrency.
Investor Keith Johnson filed a complaint against the entrepreneur and his companies in the Manhattan federal court this Thursday.
Johnson accused Musk of racketeering for touting Dogecoin and driving up its price, only to then let the price tumble.
The investor is seeking $86 billion in damages, in addition to tripled damages of $172 billion for losses incurred from trading the cryptocurrency since 2019.
The complaint said: “Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading” adding: “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.”
According to US legal news website Jurist, Johnson claimed he purchased Dogecoin in April of 2021 as a result of Musk’s conduct.
Ultimately, Johnson sold his Dogecoin in June 2022 for a loss of approximately 70% of his investment.
The complaint cited high-profile business individuals’ mentions of Dogecoin being a “joke with no real value” and noted how cryptocurrencies overall are “nothing more than a period scheme posing as currency.”
Johnson alleged that Musk committed civil Racketeer Influenced and Corrupt Organizations Act (RICO) violations through wire fraud, gambling, common law fraud, negligence, false advertising, deceptive practices, product liability by failure to warn, and unjust enrichment.