A cryptocurrency investor Dogecoin Thursday sued Elon Musk for $258 billion, accusing him of illegally engaging in an investment, known as a pyramid scheme, to support the cryptocurrency, according to a Reuters report.
In a complaint filed in federal court in Manhattan, Attorney Keith Johnson charged Musk and electric car maker Tesla and space tourism company SpaceX with racketeering by promoting Dogcoin and raising its price, before letting the price go down later.
Musk is the CEO of both Tesla and SpaceX.
"The defendants had known since 2019 that Dogecoin had no value and yet they promoted it to profit from its trading. Musk used his position as the world's richest man to run Dogecoin and speculate on it in a pyramid scheme (illegal) to make profits and entertainment," the complaint reads.
Also included in the complaint were comments from Warren Buffett, Bill Gates and others questioning the value of this cryptocurrency.
Tesla, SpaceX and Musk's lawyers did not immediately respond to requests for comment to Reuters.
Johnson's attorney has not yet responded to requests for comment regarding the specific evidence his client has or expects to obtain that proves Dogecoin is worthless and that the defendants operated a pyramid scheme in an illegal investment.
Case details
Johnson is seeking $86 billion in damages, the amount of the cryptocurrency's market cap drop since May 2021, and he wants to triple it.
He also wants to prevent Musk and his companies from promoting Dogecoin, with a judge declaring its trading gambling under federal and New York law.
Tesla said in February 2021 that it had bought $1.5 billion in cryptocurrency, and accepted it for a short period of time for its vehicles.
And SpaceX announced last year that it would accept payments in crypto-currency Dogecoin for one of its missions on the moon.
Musk said on Twitter in April 2021 that SpaceX would "literally" put Dogecoin on the moon.
Musk's tweets have turned this previously obscure digital currency that started as a joke on social media, into a speculator's dream.
Dogecoin was trading at about 5.8 cents on Thursday, down from a peak of 74 cents hit in May 2021.