$258B Cryptocurrency Lawsuit Against Musk Expands

Investors accuse of him of inflating Dogecoin's value before letting it crash
By Rob Quinn,  Newser Staff
Posted Sep 8, 2022 8:32 AM CDT
Musk, Companies Sued in $258B Dogecoin Lawsuit
FILE - This mobile phone app screen shot shows the logo for Dogecoin, in New York, Tuesday, April 20, 2021. The recent trading frenzy over a digital token called Shiba Inu — commonly billed as a “meme” or joke coin — has vaulted the canine-themed cryptocurrency into the top ten most valuable digital...   (AP Photo/Richard Drew)

A lawsuit accusing Elon Musk and his companies of artificially driving up the price of the Dogecoin cryptocurrency before letting it crash in 2021 has expanded, adding new defendants and new investor plaintiffs, according to a court filing. Reuters reports that the $258 billion lawsuit now includes Musk's Boring Company as well as SpaceX and Tesla. The racketeering lawsuit accuses Musk and the companies of operating a pyramid scheme that drove up the price of Dogecoin—which was started as a joke in 2013—more than 36,000% over two years.

Dogecoin rose from a fraction of a cent in late 2020 to a high of more than 70 cents in May 2021—but the price crashed after Musk described it as a "hustle" in a Saturday Night Live appearance that month. After the wider decline in cryptocurrency values this year, it's now trading at around six cents. The defendants added in the Tuesday filing include the Dogecoin Foundation, which describes itself as a nonprofit providing "governance and support" for the cryptocurrency, Fox Business reports.

The lawsuit, originally filed in June by investor Keith Johnson, said the defendants made billions of dollars in profit from Dogecoin, but they knew it had no intrinsic worth and its value depended entirely on marketing. "Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading," the complaint said, per Reuters. "Musk used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement." After the original lawsuit was filed, Musk said he would continue to support Dogecoin.

(More Dogecoin stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.