The Chief Executive Officer of Tesla and SpaceX, Elon Musk was sued on Thursday for $258 billion over an alleged pyramid scheme to support the cryptocurrency.
A Dogecoin investor, Keith Johnson, the plaintiff filed a complaint in a Manhattan federal court.
Elon Musk, and his companies, electric car company Tesla Inc. and space tourism company SpaceX are accused of racketeering for promoting Dogecoin and escalating its price, only to then let the price crash.
According to the complaint, the cryptocurrency’s selloff began around the time Musk hosted the NBC show “Saturday Night Live and, playing a fictitious financial expert on a “Weekend Update” segment, called Dogecoin “a hustle.”
“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.”
In February 2021, Tesla announced that it had bought $1.5 billion of bitcoin and for a short time accepted it as payment for vehicles.
The complaint also includes comments from Warren Buffett, Bill Gates, and others questioning the value of cryptocurrency.
Tesla, SpaceX and a lawyer for Musk did not immediately respond to requests for comment.
A lawyer for Johnson did not immediately respond to requests for comment on what specific evidence his client has or expects to have that proves Dogecoin is worthless and the defendants ran a pyramid scheme, reports insurancejournal.com, an online insurance news media.
The plaintiff is seeking $86 billion in damages, representing the decline in Dogecoin’s market value since May 2021, and wants it tripled.
He also wants to stop Musk and his companies from promoting Dogecoin and a judge to declare that trading Dogecoin is gambling under federal and New York law.
The case is Johnson v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.