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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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.

Updated: June 17, 2022, 6:09 AM