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Tesla CEO Elon Musk Sued For $258 Bln Over Alleged Dogecoin Pyramid Scheme

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Elon Musk and his two companies, SpaceX and Tesla Inc. (TSLA), are facing a huge $258 billion lawsuit that claims the billionaire entrepreneur and his companies operated a racketeering scheme by backing Dogecoin.

The cryptocurrency Dogecoin was created by software engineers Billy Markus and Jackson Palmer as a "joke", making fun of the wild speculation in cryptocurrencies at the time. The value of Dogecoin has increased and plunged based on Musk's promotion.

Keith Johnson, who claims to be an American citizen who was defrauded out of money by defendants' Dogecoin Crypto Pyramid Scheme, has sued Musk and his companies, claiming they constitute an illegal racketeering enterprise to inflate Dogecoin's price.

"Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all," Johnson said in his complaint, filed Thursday in federal court in Manhattan.

He is seeking his motion, filed in a New York court, to be classified as a class action suit on behalf of those who have suffered losses by investing in dogecoin since 2019.

He is asking for $86 billion in damages, plus triple damages of $172 billion, as well as an order blocking Musk and the companies from promoting Dogecoin, and declaring that Dogecoin trading constitutes gambling under US and New York law.

Dogecoin was trading on Friday at about 5 cents and is down about 67% for the year-to-date period.

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