“He used his pedestal as the richest man in the world”: they file a millionaire lawsuit against Elon Musk for promoting a cryptocurrency

An investor in Dogecoin, a cryptocurrency originally created as a joke but whose value rose and fell as it was promoted by Elon Musk, filed a $258 billion lawsuit on Thursday against the billionaire and his companies Tesla and SpaceX.

He accuses Musk, the electric car company Tesla Inc. and the space tourism company SpaceX of illegal organized crime to inflate the price of dogecoin, to promote dogecoin and make its price rise, and then drop it. Musk is CEO of both Tesla and SpaceX.

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The investor requests that his motion, filed in a New York court, be classified as a class action lawsuit on behalf of those who have suffered losses when investing in dogecoin since 2019.

Ever since Musk started promoting virtual currency, investors have lost about US$ 86 billion, estimateda Johnson. He would like Musk to reimburse investors this sum, in addition to paying twice as much in damages: an additional $172 billion.

“Defendants were aware as early as 2019 that dogecoin was worthless, and yet promoted dogecoin for profit,” the lawsuit says. “Musk used the pedestal of himself as the richest man in the world to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and fun.”

Johnson named the electric car maker Tesla of Musk in the lawsuit, since it accepts dogecoin as payment for certain derivative products. SpaceX it was also listed for naming one of its satellites dogecoin. The plaintiff compared dogecoin to a pyramid scheme, as the virtual currency has no intrinsic value and is not a product. Furthermore, it is not backed by a tangible asset and the number of “coins” is unlimited.

Founded in 2013, the creators of dogecoin say it was intended as a tongue-in-cheek response to two big internet phenomena: cryptocurrencies like bitcoin and the popular meme of a Japanese Shiba Inu dog.

dogecoin price

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The dogecoin price traded at fractions of a cent for most of its existence. Nevertheless, raised its value at the beginning of 2021rising to $0.73 in May of that year, powered by Reddit forumin an action similar to what happened with GameStop, and after the humorous messages about Musk.

These types of actions are called “meme”. It is when a group of company stock assets is boosted by users of forums like Reddit. For example, in this forum, the group called WallStreetBets coordinated a series of maneuvers to increase the shares of the video game store GameStop in the stock market.

Shortly after, a Reddit user calling himself “Satoshi” created the SatoshiStreetBets forum, with the original goal of doing a “GameStop effect” but with the cryptocurrency market. One of the first forum posts said: “Let’s make DOGECOIN a thing. That’s it. That’s the post.” (“Let’s make DOGECOIN a real thing. That’s it. That’s the post.”)

Keep in mind that the dogecoin is a memecoin or meme cryptocurrencies, which are digital currencies whose value has more to do with the popularity of social networks than with their quality as software products. Dogecoin is one of the most well-known meme coins, but there are many more.

The popularity of dogecoins led many users to start shoppingthe Y the value of the currency it started To increase, becoming at one point the ninth most valuable cryptocurrency in the world. Nevertheless, this Thursday It was worth less than six cents.

In Johnson’s opinion, Musk contributed to increasing “the price, market capitalization, and trading volume of dogecoin” through his promotion.


— Elon Musk (@elonmusk) January 28, 2021

Dogecoin is the people’s crypto

— Elon Musk (@elonmusk) February 4, 2021

It included tweets from Musk, the world’s richest man who has more than 98 million Twitter followers, including one promising that SpaceX “would put a dliteral ogecoin on the literal moon”.

SpaceX is going to put a literal Dogecoin on the literal moon

— Elon Musk (@elonmusk) April 1, 2021

Lawsuits from investors who feel cheated by the promises of virtual currency are on the rise in the United States.

The complaint also adds comments from Warren Buffett, Bill Gates and others who question the value of cryptocurrency.

Neither Tesla, nor SpaceX, nor Musk’s attorney have so far responded to requests for comment. He hasn’t written anything on his Twitter account about it either.

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