Musk is accused of creating “a cryptographic pyramid scheme through the dogecoin cryptocurrency”;
In addition to the billionaire, his companies Tesla and SpaceX are also named in the lawsuit;
The claimant is a US citizen who has racked up losses on the cryptocurrency since 2019.
Elon Musk has been hit by a $258 billion lawsuit alleging that the tech mogul and his high-profile companies “are involved in a cryptographic pyramid scheme through dogecoin cryptocurrency”.
In federal court documents filed in Manhattan, the plaintiff, Keith Johnson, names Musk, as well as his electric car company Tesla and space tourism company SpaceX.
Johnson, a US citizen, wants $86 billion in damages, plus triple damages of $172 billion for losses incurred from trading dogecoin since 2019. He is trying to represent a class of people who have lost money investing in dogecoin. The lawsuit also requires Musk, Tesla and SpaceX to stop promoting dogecoin.
“Dogecoin is not a currency, stock or bond. It is not backed by gold, other precious metal or anything. You can’t eat it, grow it, or use it… It’s simply a fraud by which ‘greatest fools’ are tricked into buying the coin at a higher price,” according to the lawsuit.
Musk, the world’s richest person, whose net worth was estimated by Forbes at $202.9 billion, did not respond to the lawsuit.
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Earlier this year, Musk revealed that Tesla began accepting dogecoin for transactions on its online store. SpaceX is expected to follow suit in the near future. The announcement caused the value of dogecoin to soar.
Dogecoin was trading 4.79% higher on Thursday afternoon, while other well-known cryptocurrencies such as bitcoin were trading lower. Bitcoin is down 1.07% to $21,062.88. Ethereum is up 0.53% to $1,113.69, according to data from Coinbase.