Business magnate Elon Musk, and his companies Tesla and SpaceX were sued for $258 B by a Degecoin investor, who accused the businessman of operating a pyramid scheme to promote the meme coin.
The class action complaint was submitted in federal court in Manhattan. Plaintiff Keith Johnson accused Musk and the firms of resulting in the price growth of the DOGE price only to let the price fall later. According to allegations, defendants knew since 2019 that the coin was valueless, but promoted it for trading to make profit.
The investor finds Musk used his status to direct the pyramid for gains, exposure and amusement, making investors believe that the price will grow indefinitely.
The document says since Musk and companies started supporting DOGE, Plaintiff and the class have lost around $86 B, while defendants were enriched through fraud, gambling enterprise, false advertising, misleading practices and other unlawful actions.
Johnson is seeking $86 B in damages, which represents the drop in Dogecoin's market value since May 2021, and triple the amount of $172 B. Also, the complaint seeks an order declaring that DOGE trading is considered gambling within the meaning of federal law.