Elon Musk faces expanded $258 billion Dogecoin lawsuit

Billionaire accused of intentionally driving up cryptocurrency price more than 36,000% over two years and then letting it crash

A sticker advertising Dogecoin on a cryptocurrency ATM in Hong Kong. Bloomberg
Beta V.1.0 - Powered by automated translation

The $258 billion lawsuit accusing Elon Musk of running a pyramid scheme to support the cryptocurrency Dogecoin has expanded, adding seven new investor plaintiffs and six new defendants including his tunnel construction business Boring.

According to an amended complaint filed on Tuesday night in a Manhattan federal court, Mr Musk, his electric car company Tesla, his space tourism company SpaceX, Boring and others intentionally drove up the price of Dogecoin more than 36,000 per cent over two years and then let it crash.

By doing so, the defendants "profited tens of billions of dollars" at other Dogecoin investors' expense, while knowing all along that the currency lacked intrinsic value and that its value "depended solely on marketing", the complaint said.

Tesla, SpaceX and Boring did not immediately respond on Wednesday to requests for comment. Tesla disbanded its media relations department in 2020.

The original lawsuit was filed in June.

Shortly afterwards, Mr Musk, the world's richest person, tweeted that he would "keep supporting Dogecoin,". He said "people that work around the factory at SpaceX or Tesla" asked him for that support, the amended complaint said.

Other new defendants include the Dogecoin Foundation, which calls itself a non-profit providing management and support for Dogecoin. It could not immediately be reached for comment.

The $258bn in damages is triple the estimated decline in Dogecoin's market value since May 2021.

That was around the time Mr Musk, playing a fictitious financial expert on a Weekend Update segment of NBC's Saturday Night Live, called Dogecoin "a hustle".

Dogecoin was trading at about 6 cents on Thursday, down from about 74 cents in May 2021.

Updated: September 08, 2022, 6:33 AM