The complainant labeled the now-struggling meme token Dogecoin a pyramid scheme.
The richest man in the world is facing a lawsuit filed after Dogecoin, the crypto he promoted, dropped to a nadir.
The claimant, a certain Keith Johnson is demanding a settlement of almost $258 billion in damages. Johnson claims the defendant advertised Dogecoin as a legitimate investment when it was just a pyramid scheme. He also desires that New York law bans the defendant from promoting the meme token again.
In a southern New York lawsuit on June 16, the aggrieved American investor accused Elon Musk of illegal racketeering. More interestingly, the billionaire entrepreneur is not the only one implicated in the lawsuit. Johnson is alleging that Musk’s companies SpaceX and Tesla promoted dogecoin.
Elon Musk and His Companies Accused of DOGE Inflation
Since 2021 when Elon Musk first tweeted the word ‘Doge’, the Tesla CEO has been openly relentless in his promotion of Dogecoin. For a crypto token originally created as a meme coin, the billionaire’s support spearheaded a meteoric rise in its value.
Doge day afternoon
— Elon Musk (@elonmusk) March 13, 2021
Although DOGE has little to no use cases by design, it hasn’t stopped it from rising to an all-time high of $0.70 under Musk’s influence. Moreover, within a year, Musk-affiliated developments like RadioDoge and others have given the meme token new utilities that were not existent in its original design.
However, despite Musk’s heavy influence, DOGE has been on a steady decline since the start of the year. Now trading at $0.054, the coin has lost more than 92% of its ATH.
In the scheme of things, Keith Johnson alleges that Musk’s action was a pyramid scheme. A ploy aimed at boosting the value of the meme coin when it had no value in the actual sense. A pyramid scheme is an investment type that rewards individuals for recruiting others. This kind of scheme does not derive its value from providing any products or services. It is considered illegal in most countries.
Keith Johnson Demands almost $300 billion as Compensation
The claimant maintained that he is standing on behalf of the Americans who lost money because they believed in Musk’s endorsement of Dogecoin. In the lawsuit, Johnson demanded the defendant remits $86 billion plus another $172 billion, $258 billion in total as compensation. An amount higher than the billionaire’s net worth.
Dogecoin might be my fav cryptocurrency. It’s pretty cool.
— Elon Musk (@elonmusk) April 2, 2019
Furthermore, the plaintiff requests that Elon Musk, Tesla, and SpaceX cease advertising Dogecoin. He wishes that New York law would render trading in dogecoin illegal.
At writing, neither Musk nor his flagship firms have made any statement in response to the complaint