Elon Musk, Tesla and SpaceX sued over alleged Dogecoin pyramid scheme

Claimant says billionaire and companies 'falsely and deceptively claim that Dogecoin is a legitimate investment'

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  Mr Musk unveils a new all-wheel-drive version of the Model S car in Hawthorne, California, in 2014. Reuters

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  Tesla and SpaceX founder Elon Musk. Getty Images

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  Mr Musk with music producer Quincy Jones. AFP

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  The wealthiest person in the world with a worth of $274.3 billion, Mr Musk was named 'Person of the Year' by 'Time' magazine in 2021. Getty Images

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  Focus on Mr Musk's taxes grew last year as Tesla achieved a rarefied $1 trillion in market value. Reuters

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  The billionaire has hit back, saying he does not draw a salary from either SpaceX or Tesla, and pays an effective tax rate of 53 per cent on stock options he exercises. AFP

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  Then US president Barack Obama speaks to Mr Musk on a tour of Cape Canaveral Air Force Station in Cape Canaveral, Florida, in 2010. Reuters

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  Mr Musk during a television interview after Tesla's initial public offering at the Nasdaq market in New York, in 2010. Reuters

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  With former wife Talulah Riley at the 2011 Orange British Academy Film Awards in London. Getty Images

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  With Japan's former prime minister Shinzo Abe after a test drive of the Tesla Model S P85D in Palo Alto, California, in 2015. Reuters

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  Mr Musk during the 67th International Astronautics Congress in Guadalajara, Mexico, in 2016. EPA

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  From left: SpaceX chief executive Elon Musk, Corning chief executive Wendell Weeks, then US president Donald Trump and Johnson & Johnson chief executive Alex Gorsky during a meeting at the White House. AFP

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  Mr Musk and former wife Grimes at The Metropolitan Museum of Art in New York City, in 2018. AFP

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  Mr Musk leaves a court in New York City, in 2019, after a hearing in a lawsuit brought against him by the US Securities and Exchange Commission. Getty Images

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  A prototype of SpaceX's Starship spacecraft is seen before Mr Musk gives an update on the company's Mars rocket Starship in Boca Chica, Texas, in 2019. Reuters

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  Mr Musk at the construction site of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, last year. EPA

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  Dancing onstage during a delivery event for Tesla's China-made Model 3 cars in Shanghai. Reuters

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  Mikey Day as a lawyer, Cecily Strong as a judge, and host Elon Musk as Wario during the "Wario" sketch on NBC's 'Saturday Night Live', in May. Getty Images

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  Mr Musk with Armin Laschet, CDU party federal chairman and prime minister of Germany's North Rhine-Westphalia, talk during a tour of the plant of the future foundry of the Tesla Gigafactory in Grünheide, near Berlin, Germany. Getty Images

Elon Musk, SpaceX and Tesla are being sued for $258 billion over claims they are part of a racketeering scheme to back the cryptocurrency Dogecoin.

Keith Johnson, “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme”, is suing Mr Musk and his companies, claiming they constitute an illegal racketeering enterprise to inflate Dogecoin’s price.

“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” Mr Johnson said in his complaint, filed on Thursday in a Manhattan federal court.

Mr Johnson is seeking to represent people who have lost money trading in Dogecoin since April 2019.

He is asking for $86 billion in damages, plus triple damages of $172bn, as well as an order blocking Mr Musk and the companies from promoting Dogecoin, and declaring that Dogecoin trading constitutes gambling under US and New York law.

Mr Musk did not immediately respond to emails seeking comment on the suit. Representatives of SpaceX and Tesla, and Tesla’s legal counsel, also did not respond straight away.

Dogecoin was trading on Thursday at about 5 cents and is down about 67 per cent this year. It shot up as high as 74 cents last year before giving up those gains.