To the moon! Or rather in the basement. An investor who lost money bet on dogecoinAn originally spoof cryptocurrency inflated in particular by interest from Elon Musk, filed a lawsuit Thursday claiming $258 billion from the billionaire and his companies Tesla and SpaceX.
Keith Johnson describes himself as a “US citizen who was defrauded by a dogecoin pyramid scheme set up by the defendants.” He asks that his complaint, filed in a New York court, be classified as a class action lawsuit on behalf of investors who have suffered losses betting on dogecoin since 2019.
Since Elon Musk started promoting the virtual currency that year, people who invested money in it have lost about $86 billion, he estimates. He claims reimbursement of this sum and double the damages, or 172 billion.
Divided by 10 from “Saturday Night Live”
Created in 2013, dogecoin was an ironic response to the two internet phenomena of the year: cryptocurrencies, which multiplied in the wake of bitcoin, and the Shiba Inu photo montage that was hugely popular on the internet.
The dogecoin price has moved below a penny for most of its history. But fueled by some buying frenzy around unlikely values in early 2021, as well as Elon Musk’s multiple messages of praise on Twitter, dogecoin shot up to over 70 cents in May 2021. Before starting to pull back shortly after the broadcast of a satirical program in which Elon Musk called in a sketch to saturday night live the virtual currency “scam”.
It was moving below 6 cents on Thursday, as the crypto market underwent a major correctionfueled by the fall of bitcoin.
Keith Johnson believes that Elon Musk “inflated the price, capitalization, and trading volumes” of the cryptocurrency by announcing it. He transcribed in his complaint the numerous tweets spread by the account of the richest man in the world, which has more than 98 million subscribers, including one that promises to take “literally a dogecoin to the Moon”.
A pyramid scheme, according to the plaintiff
It also includes two companies led by the businessman: the electric vehicle manufacturer Tesla for accepting dogecoin as payment for certain derivatives, and the space company SpaceX for having baptized one of its satellites according to dogecoin.
Keith Johnson likens dogecoin to a pyramid scheme, since, according to the complaint, the virtual currency has no intrinsic value, produces nothing, is not backed by any tangible assets, and the number of “coins” in circulation is unlimited. Complaints from investors who feel cheated by the promises of virtual currencies are currently on the rise in the United States with no guarantee of their outcome.