In a notable legal development, Elon Musk and the companies SpaceX and Tesla faced a civil lawsuit on Thursday. The plaintiff, a businessman and investor, seeks a combined 258 billion dollars in compensation, alleging involvement in a Dogecoin related scheme that resembles a pyramid structure aimed at boosting the cryptocurrency’s value.
Keith Johnson filed the case under the banner A US citizen scammed by the Dogecoin crypto pyramid scam, accusing Musk and the affiliated firms of organizing illegal criminal activity designed to inflate Dogecoin prices. The suit paints a picture of a coordinated effort to manipulate the market in favor of the founders and their enterprises.
Industry coverage notes that Dogecoin traded at approximately 0.056 dollars around midday, with its all-time high reaching 0.722 dollars on May 7, 2021. This context underscores the volatility that the plaintiffs say was exploited by the defendants in pursuit of personal gain.
Johnson, who asserts representation on behalf of himself and others who have suffered losses in Dogecoin investments since April 2019, is pursuing 86 billion dollars in compensatory damages and more than 172 billion dollars in punitive damages. The aim of the latter is to punish the defendants and deter similar conduct in the future, according to the filing. Additionally, the text requests a prohibition that would stop Musk and the two companies from promoting Dogecoin going forward.
There has been no public statement from Musk or the two companies regarding the allegations at this time.