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.
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Label: Warner Records
Number of tracks: 11
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Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
