To the moon! Or rather in the cellar. An investor who lost money by betting on dogecoin, a cryptocurrency originally parody inflated in particular by the interest of Elon Musk, filed a lawsuit on Thursday claiming $ 258 billion from the multi-billionaire and his companies Tesla and SpaceX.
Keith Johnson describes himself as an “American citizen who was defrauded by a dogecoin pyramid scheme set up by the defendants”. He is asking that his complaint, filed in a New York court, be classified as a class action on behalf of investors who have suffered losses by betting on dogecoin since 2019.
Since Elon Musk started promoting the virtual currency that year, people who invested money in it lost around $86 billion, he estimates. He claims reimbursement of this sum and double in damages, or 172 billion.
Divided by 10 since “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 montages of a photo of a Shiba Inu dog that was very popular on the internet.
The price of dogecoin has moved below one cent for the majority of its history. But boosted by a certain buying frenzy around unlikely values at the start of 2021 as well as by Elon Musk’s multiple praise messages on Twitter, dogecoin soared to more than 70 cents in May 2021. Before starting to back down shortly after the airing of a satirical program in which Elon Musk called in a sketch a Saturday Night Live the “scam” virtual currency.
It was trading below 6 cents on Thursday as the crypto market suffered a huge correction, driven by the decline in bitcoin.
Keith Johnson believes that Elon Musk “inflated the price, capitalization and trading volumes” of cryptocurrency by advertising it. He transcribed in his complaint the many tweets broadcast on the account of the richest man in the world, which has more than 98 million subscribers, including one promising to take “literally a dogecoin to the Moon”.
A pyramid scheme, according to the plaintiff
It also includes two companies led by the entrepreneur: electric vehicle maker Tesla for accepting dogecoin as payment for certain derivatives, and space company SpaceX for naming one of its satellites after dogecoin.
Keith Johnson likens dogecoin to a pyramid scheme, in that, according to the complaint, the virtual currency has no intrinsic value, yields nothing, is not backed by any tangible asset, and the number of “coins” in circulation is unlimited. Complaints from investors who feel cheated by the promises of virtual currencies are currently increasing in the United States without any guarantee of their outcome.