NEW YORK, June 16 (Reuters) – Elon Musk was sued for $258
billion on Thursday by a Dogecoin investor who accused him of
running a pyramid scheme to support the cryptocurrency.
In a complaint filed in federal court in Manhattan,
plaintiff Keith Johnson accused Musk, electric car company Tesla
Inc and space tourism company SpaceX of racketeering
for touting Dogecoin and driving up its price, only to then let
the price tumble.
Musk is CEO of both Tesla and SpaceX.
“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.”
The complaint also aggregates 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.
Johnson 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 block Musk and his companies from promoting
Dogecoin and a judge to declare that trading Dogecoin is
gambling under federal and New York law.
The complaint said Dogecoin’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.”
Tesla in February 2021 said it had bought $1.5 billion of
bitcoin and for a short time accepted it as payment for
vehicles.
Dogecoin traded at about 5.8 cents on Thursday, down from
its May 2021 peak of about 74 cents.
The case is Johnson v. Musk et al, U.S. District Court,
Southern District of New York, No. 22-05037.
(Reporting by Jonathan Stempel in New York; Editing by Leslie
Adler)
