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Elon Musk Accused by More People of Running Dogecoin Pyramid Scheme; Know Details

Seven new investor plaintiffs have joined the $258 billion racketeering lawsuit that accused Tesla CEO Elon Musk of running a pyramid scheme in order to support popular cryptocurrency Dogecoin, expanding the case further. The case also got expanded as six new defendants including Musk’s tunnel construction business Boring Co joined the same.

An amended complaint reportedly filed on Tuesday night in Manhattan federal court has said that Elon Musk, his electric car making company Tesla Inc, his space tourism ccompany SpaceX along with Boring and others intentionally caused the price of Dogecoin to go up by more than 36,000 per cent over two years and then let it crash.

Tesla, SpaceX and Boring did not immediately respond on Wednesday to requests for comment. Tesla disbanded its media relations department in 2020, Reuters reported.

The original lawsuit was filed in June.

Shortly afterward, Musk, the world’s richest person, tweeted that he would “keep supporting Dogecoin,” and in an interview said “people that work around the factory at SpaceX or Tesla” asked him for that support, the amended complaint said.

Other new defendants include the Dogecoin Foundation, which calls itself a nonprofit providing governance and support for Dogecoin. It could not immediately be reached for comment.

The $258 billion in damages is triple the estimated decline in Dogecoin’s market value since May 2021.

That was around the time Musk, playing a fictitious financial expert on a “Weekend Update” segment of NBC’s “Saturday Night Live,” called Dogecoin “a hustle.”

In the complaint filed in June,

plaintiff Keith Johnson accused Musk, electric car company Tesla Inc and space tourism company SpaceX of racketeering for touting Dogecoin and driving up its price, only to then let the price tumble, as per reports.

Keith Johnson, who said he lost his money after having invested in Dogecoin, called himself as an “American citizen who was defrauded” by in what he referred to as a “Dogecoin Crypto Pyramid Scheme.”

“Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading,” the complaint said. “Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement,” it added.

Dogecoin traded at about 6 cents on Wednesday, down from around 74 cents in May 2021, according to Reuters. At the time of writing this article on Friday, Dogecoin prices remained at $0.06332, as per data from CoinMarketCap.

The case is Johnson et al v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.

(With Reuters Inputs)

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