Elon Musk and his companies sued for $258 billion over alleged crypto pyramid scheme
Musk accused of a pyramid scheme, also known as, Ponzi scheme leading to an increase in price, only for it to tumble
By : Legal Era
Update: 2022-06-18 09:00 GMT
Elon Musk and his companies sued for $258 billion over alleged crypto pyramid scheme.
Musk accused of a pyramid scheme, also known as, Ponzi scheme leading to an increase in price, only for it to tumble.
Elon Musk, Tesla, and SpaceX were sued by a Dogecoin investor, Keith Johnson for $258 billion. Musk is accused of orchestrating a pyramid scheme to support the cryptocurrency.
The class-action suit is filed in the US District Court in the Southern District of New York. Musk is accused of allegedly committing civil Racketeer Influenced and Corrupt Organizations Act (RICO) violations through wire fraud, gambling, common law fraud, negligence, false advertising, deceptive practices, product liability by failure to warn, and unjust enrichment.
The issue arose in 2019 when Musk, along with Tesla and SpaceX purchased, developed, and promoted Dogecoin, resulting in a sudden price hike of the cryptocurrency. Johnson claims that he, along with the rest of the class suit lost approx. $86 billion in the pyramid scheme. He further claims that the prices fluctuated due to the repeated posting on social media via Musk's account.
As a result of Musk's repeated promotion, Johnson purchased the Dogecoin in April 2021, however, ended up losing 70% of his investment which was sold in June 2022.
Johnson further claims that high-profile business individuals state that Dogecoin is a "joke with no real value."
As a remedy, Johnson seeks $86 billion in compensatory damages, along with "treble damages" amounting to $172 billion-as a result of a statute permitting the court to triple the amount of damages-together with attorneys' fees and the costs of this action.