Elon Musk and two of his companies, Tesla and SpaceX, are facing a $258 billion lawsuit, according to Thursday reports.
Bloomberg today reported that an American citizen is suing the world’s richest man for allegedly pumping Dogecoin. The lawsuit alleges that Musk was part of a racketeering scheme to back the cryptocurrency.
“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” Keith Johnson, who filed the lawsuit, said in the complaint. Johnson is seeking class-action status for the suit and aims to represent other allegedly harmed investors.
Dogecoin was originally designed in 2013 as a joke and to poke fun at Bitcoin. But it went from being an obscure “meme coin” to arguably the most talked about digital asset in the space during 2020 and 2021.
This is mainly because Tesla CEO Musk would post memes about it on Twitter and, in turn, pump its price. It’s now the 11th biggest digital asset, with a market cap of $7.5 billion. At one point, that figure was as high as $88 billion—bigger than the market cap of many companies on the S&P 500.
But according to Bloomberg’s report, Johnson wants to represent people who lost money trading the asset. He is asking for $86 billion in damages, along with triple damages of $172 billion.
Johnson is also asking for an order blocking Musk and his companies from promoting Dogecoin—and that Dogecoin trading constitutes gambling under U.S. and New York law, Bloomberg reported.
Dogecoin, despite being based on the meme of a dog, may have some uses: most recently, Musk said SpaceX and Tesla would soon accept the cryptocurrency for payment. And developers have been working with Musk on making it a Bitcoin rival.
Other big names are also all-in on DOGE—billionaire businessman Mark Cuban, who owns the Dallas Mavericks, has said that he believes Dogecoin has value as a payment system.