Musk, Tesla, SpaceX sued for alleged Dogecoin pyramid scheme

Elon Musk, SpaceX and Tesla are being sued for US$258 billion over claims they are part of a racketeering scheme to back the cryptocurrency Dogecoin.

Keith Johnson, "an American citizen who was defrauded out of money by defendants' Dogecoin Crypto Pyramid Scheme", sued Musk and his companies, claiming they constitute an illegal racketeering enterprise to inflate Dogecoin's price.

"Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all," Johnson said in his complaint, filed on Thursday (Jun 16) in federal court in Manhattan.

Johnson is seeking to represent a class of people who have lost money trading in Dogecoin since April 2019. He is asking for US$86 billion in damages, plus triple damages of US$172 billion, as well as an order blocking Musk and the companies from promoting Dogecoin, and declaring that Dogecoin trading constitutes gambling under US and New York law.

Musk did not immediately respond to emails seeking comment on the suit. Representatives of SpaceX and Tesla, and Tesla's legal counsel, also did not respond right away.

Dogecoin was trading on Thursday at about 5 US cents and is down about 67 per cent this year. It spiked to as high as 74 US cents last year before giving up those gains. Bloomberg

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