Is Elon Musk biting him again for promoting Dogecoin? The billionaire and his company are now being sued for $258 billion for participating in a so-called “crypto pyramid scheme” through meme coins.
Sue for a meme?
The federal lawsuit was filed in lower Manhattan by plaintiff Keith Johnson, according to the New York Post. He named Musk, his car company and SpaceX in the lawsuit.
Johnson is demanding $86 billion in damages from the CEO, as well as $172 billion in Dogecoin losses since 2019. He intends to represent those who lost money trading meme coins after Musk promoted it — and he also asked Musk to stop doing so.
Dogecoin was developed in just a few hours in late 2013 by co-founders Billy Marcus and Jackson Palmer. Neither party was very interested in blockchain technology, and it was just launched to satirize the various other useless cryptocurrencies that were emerging at the time.
“Dogecoin is not a currency, stock or security,” the court filing reads. “It’s not backed by gold or other precious metals or anything. You can’t eat it, you can’t grow it, you can’t wear it.”
Ironically, Dogecoin is one of the few coins that has survived since then, thanks to the power of its meme. A Grayscale report last year found that it is actually a more recognized cryptocurrency than Ethereum.
In early 2021, Elon Musk started tweeting repeatedly to his millions of followers, especially boosting its popularity. The event made Dogecoin the first major altcoin to surpass its all-time high in BTC after more than one bull run.
However, it has lost almost all of its value since then, falling more than 90% from a high of $0.73 to $0.05 today. As the lawsuit explains, Doge “has no unique utility” compared to other cryptocurrencies, nor does it have any precious metal or interest payments to back its value.
“This is just a fraud where ‘big fools’ are tricked into buying coins at higher prices,” it wrote.
Elon Musk’s influence on the price of Dogecoin is still widespread. The coin soared last month when he announced that SpaceX would accept it as payment for merchandise, just as he started hammering out a Twitter acquisition.
The billionaire announced in March that despite the bear market, he has no plans to sell any Bitcoin, Ethereum or Dogecoin.
Binance Free $100 (Exclusive): Use this link to sign up and get your first month of Binance Futures $100 free and 10% in fees (terms).
PrimeXBT Special Offer: Use this link to register and enter code POTATO50 to get a deposit of up to $7,000.