Tesla TSLA billionaire Elon Musk, who has the power to create and destroy billions of dollars worth of bitcoin and crypto value with just a tweet, has helped the meme-based dogecoin become a top ten cryptocurrency over the last 18 months—just weeks ago revealing one reason he thinks “people love dogecoin.”
However, the dogecoin price has crashed over the last few months, losing more than 90% of its value since hitting an all-time high in May last year and dropping along with the price of bitcoin, ethereum and the wider crypto market.
Now, as bitcoin and ethereum teeter on the brink of disaster, Musk and his companies Tesla and SpaceX have been hit with a $258 billion lawsuit claiming they are part of a racketeering scheme to pump the dogecoin price.
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“[Musk, Tesla and SpaceX] falsely and deceptively claim that dogecoin is a legitimate investment when it has no value at all,” Keith Johnson, described as “an American citizen who was defrauded out of money by defendants’ dogecoin crypto pyramid scheme,” wrote in the complaint.
Johnson, who filed the lawsuit in New York, is seeking class-action status for the suit and aims to represent other allegedly harmed investors. He’s asking for $86 billion in damages, along with triple damages of $172 billion, as well as an order blocking Musk, Tesla and SpaceX from promoting dogecoin.
“[Dogecoin DOGE is] simply a fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price,” the lawsuit read before going on to list Musk’s multiple tweets and public statements that have pushed up the dogecoin price over the last 18 months.
Musk, who was voted “dogecoin CEO” in a joke Twitter poll in 2019 and adopted the moniker “The Dogefather,” has been a fan of the tongue-in-cheek bitcoin rival for years, naming dogecoin as his favorite cryptocurrency.
Musk has previously said he personally owns dogecoin, along with bitcoin and ethereum. In early 2021, Musk sent the bitcoin price sharply higher when it was revealed Tesla had bought $1.5 billion worth of bitcoin.
Last year, as a bitcoin, ethereum and broad cryptocurrency bull run pushed prices to blistering highs, Musk repeatedly called on dogecoin developers to upgrade the cryptocurrency in order to “beat bitcoin hands down.”
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The dogecoin price peaked ahead of Musk’s hotly-anticipated appearance on the comedy sketch show Saturday Night Live and has since lost 93% of its value.
Since then, Musk has rolled out Tesla and SpaceX support for dogecoin payments, allowing customers to buy merchandise in dogecoin.
Tesla last year briefly began accepting bitcoin for car purchases but Musk pulled the plug just two months later, blaming bitcoin’s high energy demands and carbon footprint. Musk went onto say Tesla would most likely restart accepting bitcoin though it hasn’t done so yet.