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Elon Musk sued for $258 billion for allegedly running a pyramid scheme to promote Dogecoin

Elon Musk has been sued for $258 billion for running a pyramid scheme to promote the Dogecoin cryptocurrency.

Keith Johnson, a Dogecoin investor who says he lost money after investing in the cryptocurrency, accused Musk, his electric car company Tesla and space tourism company Space X of racketeering for promoting Dogecoin and making raise its price – only to let the price fall.

Johnson described himself as a “US citizen who was defrauded” by what he called a “Dogecoin Crypto Pyramid Scheme”.

He is asking that his petition, filed in a New York court, be characterized as a class action on behalf of those who have suffered losses investing in dogecoin since 2019.

Since Musk started promoting virtual currency, investors have lost about $86 billion, Johnson estimates. He would like Musk to repay that amount to investors, in addition to paying double in damages, or an additional $172 billion.

Johnson also wants to stop Musk and his companies from promoting Dogecoin and a judge to rule that trading Dogecoin is gambling under federal law and New York law.

Elon Musk was sued for $258 billion for running a pyramid scheme to back cryptocurrency Dogecoin

Founded in 2013, the creators of dogecoin say it was a tongue-in-cheek response to two big internet phenomena: cryptocurrencies such as bitcoin and a meme image of a Shiba Inu dog.

The price of dogecoin has traded at just fractions of a penny for most of its existence.

But it saw its value jump in early 2021, hitting $0.73 in May of that year, amid a buying frenzy that surrounded the GameStop saga and after humorous posts about it from Musk. .

On Thursday, however, it was worth less than six cents.

Johnson said he believes Musk has increased Dogecoin’s “price, market capitalization and trading volume” through his promotion.

Johnson included tweets from Musk, the world’s richest man who has more than 98 million Twitter followers, including one promising that SpaceX would “put a literal Dogecoin on the literal moon.”

“The defendants knew since 2019 that Dogecoin had no value but promoted Dogecoin to profit from its trade,” the complaint states.

Founded in 2013, the creators of dogecoin say it was a tongue-in-cheek response to two big internet phenomena: cryptocurrencies such as bitcoin and a meme image of a Shiba Inu dog.

Founded in 2013, the creators of dogecoin say it was a tongue-in-cheek response to two big internet phenomena: cryptocurrencies such as bitcoin and a meme image of a Shiba Inu dog.

The crypto “joke” that started out as a meme… what is Dogecoin?

Dogecoin is a cryptocurrency created as a “joke” in 2013.

Its mascot is a Shiba Inu dog, made popular by the “doge” meme with pictures of the dog overlaid with text written in broken English.

It can be bought or sold on crypto exchanges like Coinbase or trading apps like Robinhood and Webull.

A Dogecoin is worth 16 cents on Tuesday morning. It has never been worth more than 64 cents.

Creator Billy Markus said last year that he came up with the coin as a joke.

“I’m half detached, but it’s weird that something I did in a few hours is now part of internet culture,” he said. “It’s fun to see Elon Musk talk about it. It’s silly, but there’s this huge lift behind it.

“Musk used his pedestal as the richest man in the world to exploit and manipulate the Dogecoin pyramid scheme for profit, exposure and amusement.”

Johnson named Musk’s electric car maker Tesla in the lawsuit because it accepts dogecoin as payment for certain derivatives. SpaceX was also included for naming one of its satellites after dogecoin.

Johnson compared dogecoin to a pyramid scheme since virtual currency has no intrinsic value nor is it a commodity. Moreover, it is not backed by any tangible asset and the number of “coins” is unlimited.

Lawsuits from investors who feel deceived by the promises of virtual currency are increasing in the United States.

Tesla, SpaceX and an attorney for Musk did not immediately respond to requests for comment.

A lawyer for Johnson did not immediately respond to requests for comment on the specific evidence his client has or expects to have that proves Dogecoin is worthless and that the defendants organized a pyramid scheme.

Musk was also sued Thursday by a Tesla shareholder, who accused the billionaire and Tesla’s board of directors of ignoring employee complaints of racism and sexual harassment.

The lawsuit – filed Thursday by plaintiff Solomon Chau in Texas, where Tesla is headquartered – argues that an unaddressed “toxic work culture” at the company has caused “irreparable” damage to reputation and harm financial.

The action was the latest against Tesla, which has been hit with a series of sexual harassment lawsuits and black employees complaining of rampant racism.

In February, the state of California sued Tesla for alleged discrimination and harassment of black employees at its Fremont factory near San Francisco, claiming in a complaint that the company had created a “workplace at racial segregation”.

Thursday’s court filing said a “toxic environment has formed internally for years and the truth about Tesla’s culture only recently emerged, prompting actions from both regulators and individuals.” .

The lawsuit claims that Musk, who is Tesla’s chief executive, and his 11 board members ignored several ‘red flags’, leading to the departure of many highly qualified employees and triggering a series of costly legal proceedings. .

“These wrongs caused significant damage to Tesla’s reputation, goodwill, and standing in the business world,” the lawsuit states, and “exposed Tesla to hundreds of millions of dollars in potential liability for breach. state and federal laws.

In another lawsuit last year, Tesla was ordered to pay $137 million plus interest to a former elevator operator at its Fremont factory for turning a blind eye to racism. Earlier this year, the penalty was reduced to $15 million.

Other legal proceedings, in particular against black employees who claim to have been victims of racial insults and inappropriate sexual remarks by colleagues or superiors, are in progress.

Tesla, which has hardly responded to requests from journalists since the end of 2020, did not respond to a request from AFP.

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