A $258 billion lawsuit was filed Thursday against Elon Musk and his firms Tesla and SpaceX by a dogecoin investor. Dogecoin was developed as a joke but its value rose and fell as it was promoted by Elon Musk.
Keith Johnson, who claims to have lost money after investing in dogecoin, characterized himself as a “American citizen” who had been “defrauded” by a “Dogecoin Crypto Pyramid Scheme.”
He is requesting that his application, which was filed in a New York court, be classed as a class action complaint on behalf of anyone who have lost money investing in dogecoin since the beginning of 2019.
According to Johnson, investors have lost about $86 billion since Musk began pushing the virtual currency. He wants Musk to refund investors for this amount, plus an extra $172 billion in damages.
Dogecoin was created in 2013 as a satirical reaction to two major online phenomena: cryptocurrencies such as bitcoin and a meme picture of a Shiba Inu dog, according to its developers.
For the most of its existence, the price of dogecoin was merely fractions of a penny.
However, it enjoyed a significant increase in value at the start of 2021, climbing to $0.73 in May of that year during a purchasing frenzy sparked by the GameStop scandal and Musk’s amusing tweets about it.
It was, however, only worth less than six cents on Thursday.
Musk’s advocacy, according to Johnson, raised “the price, market value, and trading volume of Dogecoin.”
Musk, the world’s richest man, has more than 98 million Twitter followers, and one of his tweets promised that SpaceX will “place a literal Dogecoin on the literal moon.”
Because it takes dogecoin as payment for some derivative items, Johnson identified Musk’s Tesla electric automaker in the action. SpaceX was also featured since one of its satellites was named after the cryptocurrency dogecoin.
Because dogecoin has no inherent value and is not a commodity, Johnson compared it to a pyramid scam. It’s also not backed by anything actual, and the quantity of “coins” is limitless.
In the United States, lawsuits by investors who believe they have been duped by the promises of virtual money are on the rise.