Crypto investor sues Elon Musk for $258B over dogecoin ‘pyramid scheme’

A cryptocurrency investor has sued Elon Musk for $258 billion, saying the Tesla co-founder ran a pyramid scheme via dogecoin.

The lawsuit, filed by plaintiff Keith Johnson in New York, has accused Musk and his companies, Tesla and Space X, of running a “pyramid scheme” to inflate the price of the cryptocurrency.

The lawsuit added that “defendants falsely and deceptively claim that dogecoin is a legitimate investment when it has no value at all.”

According to the lawsuit, “since defendant Musk and his corporations Space X and Tesla, Inc. began purchasing, developing, investing, promoting, supporting and operating dogecoin in 2019, plaintiff and the class have lost approximately $86 billion” in what it called a “crypto pyramid scheme.”

The lawsuit also details Musk’s tweets and videos on dogecoin over the years. The lawsuit highlights how Musk referred to himself as the “Dogefather” while promoting his appearance on NBC’s “Saturday Night Live” in April 2021.

Johnson, who is referred to in the lawsuit as an “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme,” is suing for $86 billion in damages, representing the drop in the cryptocurrency’s value, and asking to triple those losses with an additional $172 billion.

He also wants Musk and his companies ordered to stop promoting dogecoin and that dogecoin trading be declared gambling under U.S. and New York law.

Musk announced in December last year that Tesla would accept dogecoin, a popular cryptocurrency, for Tesla merchandise. Musk also urged fast-food restaurant McDonald’s to start accepting cryptocurrency dogecoin as a type of payment in January.

Reuters noted at the time that dogecoin had increased by 5,859 percent in the last year, in part thanks to the support of Musk, who has called it the “people’s crypto.”

Dogecoin traded at about 5.8 cents on Thursday, down from its May 2021 peak of about 74 cents, Reuters reported.