Elon Musk Sued for $258 Billion for running a Dogecoin pyramid scheme

  • The complaint says that Musk used his influence to push more people into buying DOGE and these investors are now facing huge losses.
  • While Musk has an ongoing discussion about the Twitter acquisition, he continues to push for crypto payments on the platform.

Elon Musk’s love for memecoin Dogecoin (DOGE) could cost him $258 billion USD. U.S. citizen Keith Johnson has slapped a class-action lawsuit against Elon Musk and his businesses SpaceX and Tesla.

The lawsuit accuses Elon Musk of promoting a Dogecoin-related Ponzi scheme. Keith Johnson has filed a lawsuit at the federal court in Manhattan on behalf of other DOGE investors facing losses. In the lawsuit, Jhonson says that Musk and his businesses activities in DOGE have defrauded investors in what constitutes to be a pump and dump scheme.

It also notes that Musk’s constant backing of Dogecoin directly led to its spike. However, as the market conditions changed, the DOGE price has tailspin downwards. The complaint notes:

Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.

In his complaint, Jhonson also refers to the comments from billionaires Warren Buffett and Bill Gates who have questioned the value of the digital asset. The existence of Dogecoin (DOGE) came as a fun memecoin. However, it soon became one of the world’s top ten cryptocurrencies.

Related: Bill Gates calls cryptos and NFTs shams; says they are greater fool theory investments

Tesla and Dogecoin caught in the fire

As we know, Elon Musk has been promoting Dogecoin through his Twitter account even before the 2020 bull run. However, his love for the memecoin extended to the extent that he even tossed the idea of accepting DOGE for merchandise purchases at his companies Tesla and SpaceX.

Jhonson believes that Musk increased Dogecoin’s “price, market cap and trading volume” through his tweets. The complaint states:

Every statement and endorsement from Defendants on social media regarding Dogecoin has knowingly caused millions of people to spend billions of dollars buying into the Dogecoin Crypto Pyramid Scheme. Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.

Jhonson is now seeking damages worth $86 billion from Musk and an additional $172 billion in treble damages from SpaceX and Tesla. Amid the crypto market drop, Dogecoin has corrected 30 percent over the last week. As of press time, DOGE is trading at just $0.05 with a market cap of $7.5 billion. It is still among the world’s top ten cryptocurrencies.

Elon Musk supports crypto payments on Twitter

On the other hand, Musk believes that there’s enough logic to support crypto payments on Twitter. While speaking at the virtual all-hands meeting for Twitter on Thursday, Musk said:

Money is fundamentally digital at this point and has been for a while. It would make sense to integrate payments into Twitter so it’s easy to send money back and forth.

Musk is currently in the final discussions of his $4 billion acquisition of Twitter. If Musk succeeds, he might as well bring crypto to Twitter.

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