Elon Musk, SpaceX, and Tesla have got sued for $258 billion over claims that they are part of a criminal scheme to support the Dogecoin cryptocurrency.
Keith Johnson was a US citizen defrauded by the defendants’ Dogecoin crypto pyramid scheme. He has sued Musk and his companies, claiming they constitute an illegal enterprise to inflate the price of Dogecoin and their support.
Johnson said in his lawsuit that the defendants falsely and misleadingly claim that Dogecoin is a legitimate investment when it has no value. He filed the case on Thursday in federal court in Manhattan.
Johnson aims to represent a group of people who have lost money trading Dogecoin since April 2019. He is pursuing $86 billion in damages, plus triple damages of $172 billion. The order is blocking Musk and companies promoting Dogecoin and declaring that trading in Dogecoin constitutes gambling under the United States and New York law.
The CEO of Tesla did not immediately react to emails seeking comment on the lawsuit. Representatives for SpaceX and Tesla, and Tesla’s legal counsel, also did not reply to inquiries.
Dogecoin was trading around 5 cents on the dollar on Thursday and is down 67% this year. Last year it rose as high as 74 cents before giving up those gains.
Although Dogecoin carried its inspiration in 2013 from the famous internet meme ‘Doge,’ users have taken the cryptocurrency seriously, especially after Musk’s tweets. Quickly, its circulation grew rapidly, which has made some companies start to accept this cryptocurrency as a means of payment. That was precisely the case with Tesla, which announced at the beginning of the year that it would allow its customers to buy some items from its store by paying with Doge currency.
In mid-2021, Jackson Palmer, creator of the Dogecoin cryptocurrency, reappeared to clarify that this economic model is a fraud.
The software engineer, who created Dogecoin with a colleague as a joke in 2013, had abandoned social networks after deleting his YouTube channel and making his Twitter account private in 2019. Since then, he had not even spoken about the recent success of its digital currency but finally made a presence on networks last Wednesday. He gave his presence after publishing an extensive thread on Twitter explaining why it does not plan to return to the digital market. An Australian said that after studying it for several years, he thinks it’s an inherently right-wing hyper-capitalist technology.
He added that it’s like taking the worst parts of the capitalist system and using software to technically limit interventions that serve as protections or safety nets for the average person. The engineer also took the chance to complain about particular internet personalities who, according to him. He believes they are selling the false idea of being a billionaire like them one day and do not allow an appropriate discussion on the subject.
Criticism of Jackson Palmer on personalities like Elon Musk is not something new. A few months ago, after the appearance billionaire on the SNL show, he classified himself as a self-absorbed swindler.
Throughout the thread, the Australian explained all the points he finds negative about cryptocurrencies and the communities that have emerged from them. He considers it similar to a cult with a get-rich-quick mentality.
Finally, the engineer clarified that he will not return to the subject and that, despite everything, he thinks that new technologies can make the world better, but only if they consider their political and social consequences.
Dogecoin features the Shiba Inu dog, whose image was all the rage on the networks in 2013 when they created the Token. Almost from the beginning, Dogecoin attracted people who liked the idea of cryptocurrencies but wanted to make fun of Bitcoin. The phenomenon of cryptocurrencies partly intrigued an addicted public but, at the same time, was ready to laugh at it. But with messages like Musk’s, many small investors confidently approached the businessman’s support.