Dogecoin investor Keith Johnson has dragged Elon Musk, the world’s richest man, and his two main companies, SpaceX and Tesla, to a Federal Court on Thursday for manipulating the price of the meme coin in a deliberate “crypto pyramid scheme” over Twitter.
Elon Musk, Tesla and SpaceX were sued for $258 billion, representing the decline in Dogecoin’s market value since May 2021.
Johnson, who invested in Dogecoin in 2021, filed a class-action lawsuit in the Southern District of New York for at least $86 billion in damages and wants it tripled. A class action is a type of lawsuit where one member of a group or parties represented the group or parties in court.
In the filing obtained by Investors King, Johnson accused Elon Musk, SpaceX and Tesla, Inc. of engaging in a Crypto Pyramid Scheme by way of Dogecoin cryptocurrency.
This, he said Musk did by aggressively promoting, supporting, and operating Dogecoin since 2019 despite knowing that the cryptocurrency was created as a joke without any value or significance.
He further stated that “Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metal, or anything at all. You can’t eat it, grow it, or wear it. Dogecoin does not generate cash flow. It doesn’t pay interest or a dividend. It has no unique utility compared to other cryptocurrencies. It is not part of a new internet or the metaverse. It’s not based upon or tied to anything of value. It is not secured by a government or private entity. The number of coins is unlimited.”
Dogecoin was created in 2013 by co-founders, Billy Markus and Jackson Palmer. The meme coin was launched at $0.0002 a coin within two hours as Markus admitted that the coin was created as a joke and it relied 99.99% on the “greeter fool theory”.
However, Elon Musk promotion and support drove the price of the joke coin to $0.75 a coin in 2021, an event that lured mainstream and global youths with zero understanding of investment risk into the cryptocurrency space.
A lot of them reportedly bought at a higher price, expecting the joke coin to extend its bullish run. As expected, experienced investors started taking profit and eventually cashed out after Elon Musk, in a turn of event, started attacking the team behind the coin for allowing few individuals to hold over 70% of the coin.
Also, the entire cryptocurrency stopped following Elon Musk after Tesla stopped accepting Bitcoin as payment because of its energy consumption. Large number of the cryptocurrency community said the billionaire can not be trusted.
Since then the coin has been on a downward trend and presently trading at $0.05 a coin.
