Billionaire Elon Musk, along with his companies SpaceX and Tesla Inc, are all being sued for an astonishing $258 billion in damages for being “engaged in a crypto pyramid scheme” involving Dogecoin (DOGE).
The damages sought are more than 34 times Dogecoin’s current market cap of $7.5 billion and nearly three times its all-time high (ATH) market cap of $88.68 billion in mid-2021.
Filed in the New York District Court by an attorney at Evan Spencer Law on Thursday, the class-action lawsuit alleges that Musk “used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.”
In the filing, plaintiff Keith Johnson, a United States citizen, alleges that Musk and his corporations were “unjustly enriched” by $86 billion as a result of wire fraud, gambling enterprise, false advertising, deceptive practices and other unlawful conduct.
Johnson claims that he and others in the class-action have lost approximately $86 billion between May 2021 and June 2022, and is demanding that figure in monetary damages along with another $172 billion in damages and fees:
“Defendant Musk is the self-appointed ‘Dogefather,’ ‘former CEO of Dogecoin,’ partner, developer, spokesperson, publicist, salesman, marketer, and promoter of Dogecoin, who assembled the ‘Doge Army’ including his corporations and various billionaires, influencers, and celebrities to increase the price, market cap and trading volume of Dogecoin.”
In January, Musk announced that his electric vehicle company Telsa would accept DOGE as payment for the company’s merchandise. In May, he announced that Dogecoin payments would also be accepted by his space exploration company SpaceX.
The lawsuit also demands an order declaring the trading of Dogecoin to be constituted as gambling within New York and federal law and also alleges that Musk and his companies have violated state and federal gambling laws.
“Since Plaintiff and the class were not advised that the trading of Dogecoin was nothing more than a gambling enterprise, Plaintiff and the class demand the return of all wagers lost trading Dogecoin.”
It also seeks to order Musk and his companies and any other unlicensed professionals from advertising, marketing or promoting Dogecoin in the future.
The crypto community has ridiculed the lawsuit.
Pseudonymous Dogecoin creator Shibetoshi Nakamoto’s tweet was cited in the lawsuit as supporting evidence, calling the lawsuit “stupid as fuck” on Twitter on Thursday while admitting that crypto trading isn’t much different from gambling.
Rahul Sood, CEO, and co-founder of Irreverent Labs, which builds blockchain games called it a “stupid class-action lawsuit”
“Amazing that in the US someone could launch such a stupid class-action lawsuit. These guys all knew what they were getting into. Ridiculous."
Ron Coleman, a commercial litigator and partner at Dhillon Law Group with 196,000 Twitter followers, replied to a Tweet about the news, noting that “anyone can say anything in a lawsuit.”