Elon Musk a Bitcoin enthusiast as well as his companies SpaceX and Tesla Inc., are being sued for whooping $258 billion in damages for engaging in a crypto pyramid scheme allegedly involving meme coin, Dogecoin.
The damage being filed for is over 34 times the Dogecoin’s current market capitalization pegged at $7.5 billion and nearly three times its ATH market cap of $88.68 billion as at mid, 2021.
It was confirmed that the amount sought is way more than Elon Musk’s net worth by over $42 billion.
Koinwa gathered that the lawsuit was filed in the New York District Court by an attorney at Evan Spencer Law, and the suit alleges that the world’s richest man, “Used his pedestal as world’s richest man to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and amusement.”
Facts behind this lawsuit
- Dogecoin commenced its journey like a world joke in 2013, a meme coin as with meme stocks took off in 2021 and this attracted the attention of Elon Musk.
- Musk is a big fan of Dogecoin and all it represents especially in 2021. Initially, Elon Musk made bitcoin a means of payment for Tesla cars, however went back on this, with reasons cited about environmental concerns.
- Subsequently, Musk announced on his Twitter handle that he owned Dogecoin and went further to act and host in a Saturday Night Live Mother’s day special show, where he called Dogecoin a “Hustle,” as comedy.
- He went further to say he preferred Dogecoin to Bitcoin because it was more energy efficient and environmentally friendly than the later. Musk promised to join Dogecoin team to help make the token even more efficient, following this Musk earned himself the name “Dogefather.”
- The love for Dogecoin led Musk in January to announce that his electric vehicle company Tesla would accept Dogecoin as payment for company’s merchandize and in May, he announced that Dogecoin payments would also be accepted by his space exploration company SpaceX.
- Following his expression of love and interest in the token, the price of the token continued soaring, with Musk predicting that the token would hit $1.
- Although the meme coin never made it to the projected price, the token did hit all-time high of 0.74 cents. Dogecoin rallied a stellar 7,000% to its all-time high from the beginning of January to May in just five months. This puts Dogecoin among the top 10 cryptocurrencies by market capitalization and many argue that this would not have been possible without Musk’s influence.
- The raise of Dogecoin gave room for other meme coins like Shiba Inu, who posted astronomical returns like Dogecoin and also made its way to the top 10 by market cap.
What the lawsuit claimed
The plaintiff Keith Johnson, a U.S. citizen, claimed that Musk and his corporations were “unjustly enriched” by $86 billion as a result of wire fraud, gambling enterprise, false advertising, deceptive practices, alongside other unlawful conducts.
Johnson claimed the following in the suit,
- He and others in the class-action have lost approximately $86 billion between May 2021 and June 2022 and is demanding the figure in monetary damages along with another $172 billion in damages and fees.
- The lawsuit states. “Defendant Musk is the self-appointed Dogefather, former CEO of Dogecoin, partner, developer, spokesperson, publicist, salesman, marketer, and promoter of Dogecoin, who assembled the Doge Army including his corporations and various billionaire, influencers, and celebrities to increase the price, market cap and trading volume of Dogecoin.”
- The suit demands an order declaring the trading of Dogecoin to be constituted as gambling within New York and Federal law, and also alleges that Musk and his companies have violated state federal gambling laws.
The lawsuit sought to order Elon Musk, his companies and other unlicensed professionals to desist from advertising and marketing, or promoting Dogecoin anywhere in the future.