Elon Musk was hit with a $258 billion lawsuit that alleges the tech mogul and his high-profile firms “are engaged in a crypto pyramid scheme by means of dogecoin cryptocurrency.”
In federal court docket papers filed in Decrease Manhattan, the plaintiff, Keith Johnson, names Musk in addition to his electrical automotive firm, Tesla, and the house tourism agency SpaceX.
Johnson, a US citizen, desires $86 billion in damages, plus tripled damages of $172 billion for losses incurred from buying and selling dogecoin since 2019. He’s looking for to symbolize a category of people that have misplaced cash investing in dogecoin.
The lawsuit additionally calls for that Musk, Tesla and SpaceX stop selling dogecoin.
On Thursday, one dogecoin was price simply north of 6 cents — properly off its all-time excessive of 74 cents in Might 2021.
“Dogecoin isn’t a forex, inventory, or safety. It’s not backed by gold, different treasured steel, or something in any respect. You’ll be able to’t eat it, develop it, or put on it,” in accordance with the court docket submitting.
The lawsuit continues: “It doesn’t pay curiosity or dividend. It has no distinctive utility in comparison with different cryptocurrencies…It’s not secured by a authorities or non-public entity.”
“It’s merely a fraud whereby ‘better fools’ are deceived into shopping for the coin at a better worth.”
Musk has not responded to the lawsuit.
The announcement despatched the worth of dogecoin surging.
Tesla additionally spent $1.5 billion on bitcoin in February 2021 – a transfer the electrical automotive marker mentioned would offer “extra flexibility to additional diversify and maximize returns on our money.”
On the time of the disclosure, the worth of bitcoin was hovering within the $30,000 to $40,000 vary.
Musk this week broke his silence on the current collapse in digital asset costs — and responded to a meme revealing the subsequent sector of the financial system he expects to plunge.
Musk reacted to the steep selloff in bitcoin, the biggest cryptocurrency by market cap, which briefly plunged beneath $21,000 — its lowest degree since December 2020.
“Cryptonight,” Musk tweeted Tuesday night time.
Musk additionally replied to a meme posted by dogecoin co-creator Billy Markus.
The cartoon picture confirmed the grim reaper approaching a door labeled “actual property” after beforehand making grisly stops in rooms labeled “shares” and “cryptocurrency.”
“True,” Musk mentioned in response to the publish.
The billionaire has repeatedly touted investments in cryptocurrencies lately. In March, he declared that he “won’t sell” his holdings in bitcoin, Ethereum and Dogecoin regardless of rising inflation and financial uncertainty that has led many buyers to promote riskier asserts.
The world’s richest man has by no means disclosed how a lot of his wealth is tied to crypto.
Dogecoin was buying and selling 4.79% increased on Thursday afternoon whereas different well-known cryptocurrencies like bitcoin have been buying and selling decrease.
Bitcoin fell 1.07% to $21,062.88. Ethereum rose 0.53% to $1,113.69, in accordance with Coinbase data.