Elon Musk and two of his firms, Tesla and SpaceX, are facing a $258 billion lawsuit, over accusations they participated in a racketeering scheme designed to back the cryptocurrency Dogecoin.
According to Bloomberg, Keith Johnson, an American citizen who lost money in the defendants’ Dogecoin crypto pyramid scam, sued Elon Musk and his firms, SpaceX and Tesla, alleging that they are engaged in an unlawful racketeering operation to raise the price of Dogecoin.
“Defendants falsely and deceptively claimed the Dogecoin is a legitimate investment when it has no value at all,” Johnson said in his complaint filed Thursday in federal court in Manhattan. Johnson is attempting to get the lawsuit certified as a class action in order to represent other purportedly aggrieved investors.
Dogecoin was created as a joke
Dogecoin was created as a joke in 2013 to mock Bitcoin. However, throughout the years 2020 and 2021, it grew from being a little-known “meme coin” to possibly the most talked-about digital asset in the industry.
However, according to Bloomberg, Johnson wants to represent investors who lost money trading the asset since 2019. He is asking for $86 billion in damages, along with triple damages of $172 billion.
According to Bloomberg, Johnson is also seeking an injunction prohibiting Musk and his firms from promoting Dogecoin. Moreover, he is seeking a ruling that Dogecoin trade is illegal under US and New York law.
Musk did not reply to emails seeking comment on the lawsuit right away. According to Bloomberg, representatives from SpaceX and Tesla, as well as Tesla’s legal counsel, did not reply.
Dogecoin, although being based on a dog meme, may have some uses, as Musk recently stated that SpaceX and Tesla will soon accept the cryptocurrency as an option for the payment. Additionally, developers have been working with Musk to make it a Bitcoin competitor.