Dogecoin Pyramid Scheme: More Parties Hop Onboard $258 Billion Lawsuit against Elon Musk

This case against Elon Musk was filed around June by complainant Keith Johnson in the federal court of Manhattan, US.

Written by Radhika Parashar, Edited by Richa Sharma | Updated: 8 September 2022 15:55 IST

Dogecoin Pyramid Scheme: More Parties Hop Onboard $258 Billion Lawsuit against Elon Musk

Photo Credit: Twitter/ Dogecoin

The complaint alleges that Musk drove up DOGE prices by 36,000 percent in two years before it crashed

Highlights

Elon Musk still supports Dogecoin despite the case
Musk’s Boring Co. has become part of the defendants
Neither Musk nor Dogecoin Foundation has commented on the case

Elon Musk is facing a lawsuit that alleges that the multi-billionaire has promoted a pyramid scheme around Dogecoin promotions. Seven new investor plaintiffs and six new defendants have joined the investigation, expanding the case. This time, Musk's tunnel construction business Boring Co. has also joined the case as a defendant. This case against Musk was filed around June by complainant Keith Johnson in the federal court of Manhattan, US. The case is to investigate if Musk's support for the meme-coin, which is currently priced at $0.060 (roughly Rs. 4.80), led to financial loses for its investors.

With the addition of more plaintiffs in the case, the original complaint against Musk has also been amended. The re-worked complaint now accuses Musk, along with his companies Tesla, SpaceX, and Boring for driving up DOGE prices over 36,000 percent in the last two years, before letting it crash, Reuters reported on Thursday, September 8.

The complaint alleges that Musk and other defendants in the case pocketed billions of dollars at the expense of DOGE investors because they knew that the meme-coin did not really have enough value, but they were also aware that their marketing could hype up the altcoin.

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As of now, no official reaction from Musk or the Dogecoin Foundation has emerged on public domains.

Johnson, the first complainant in the case, is seeking $86 billion (roughly Rs. 6,71,300 crore) 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.

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The complaint mentions that 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, calling Dogecoin "a hustle."

Musk's support for DOGE is nothing new. The tech mogul, at several occasions, has called DOGE the ‘people's crypto'.

In May this year, Musk had said that SpaceX would soon start accepting DOGE payments for the sale of its merchandise.

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Further reading: Cryptocurrency, Dogecoin, Elon Musk, SpaceX, Tesla

Radhika Parashar

Email Radhika

Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More