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CEO of Tesla and SpaceX Musk Sued for $258B Over Alleged Dogecoin Pyramid Scheme

CEO of Tesla and SpaceX Musk Sued for $258B Over Alleged Dogecoin Pyramid Scheme

The lawsuit dictates that the three parties significantly manipulated the memecoin's price.

On June 16, business magnate and billionaire Elon Musk, together with his companies Tesla and SpaceX were sued for an astonishing $258B by the plaintiff and Dogecoin investor Keith Johnson over an allegation that the three parties manipulated the price of Dogecoin.

According to the official statement, Musk was accused of participating in a particular crypto pyramid scheme dubbed Ponzi scheme. The complaint filed in the New York District Court dictated that a few years ago, Musk and his two previously mentioned corporations purchased and promoted Dogecoin by using “his pedestal as World’s Richest man.”

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What is a Perpetual Contract in Crypto? (Definition + Example)

What is a Perpetual Contract in Crypto? (Definition + Example) What is a Perpetual Contract in Crypto? (Definition + Example)

As stated in the lawsuit, between May 2021 and June 2022, Johnson, along with the others in the class-action, managed to lose around $86B. On top of that, the investor implied that Musk posted too many memes regarding Dogecoin, adding that the billionaire illegally made money because of wire fraud, false advertising, deceptive practices, negligence, and other illegal activities. This, according to the Dogecoin investor, led to a significant decrease in crypto’s price.

Furthermore, the filing underlines the fact that the trading of Musk’s Dogecoin should be considered a gambling act, meaning that the three parties broke the law and “all wagers lost trading Dogecoinmust be returned.

The lawsuit also mentions that further promotion of Dogecoin must be banned. Johnson is reportedly seeking to receive $86B for punitive damages, as well as $172B to cover other costs, including lawyers’ fees and expenses.

In response to the lawsuit, a number of players in the crypto community have shared their opinions. For instance, Shibetoshi Nakamoto, the Japanese creator of Dogecoin, recently stated that it's "stupid", adding that the proposal to make all crypto into gambling is illogical.

At the beginning of this year, Musk issued a statement indicating that Tesla, an American-based electric vehicle manufacturer, would be accepting Dogecoin as a legal payment method for various goods and services. On top of that, back in May, the business magnate mentioned that SpaceX would also accept the largest memecoin as payment.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.



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