Lawsuit accuses Elon Musk of running a cryptocurrency “pyramid scheme”

Billionaire Elon Musk has made headlines in recent months as a result of his efforts to purchase the social media giant Twitter. However, he recently grabbed attention for a less welcome reason.

According to Bloomberg, Musk is at the center of a $258 billion lawsuit alleging that he operated a fraudulent cryptocurrency racket.

Plaintiff asserts that Dogecoin trading is a form of gambling  

In addition to Musk, the lawsuit also names Tesla along with SpaceX, both of which are companies that the entrepreneur heads.

It was filed by in a Manhattan federal court on Thursday by Keith Johnson, someone the suit describes as “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme.”

Johnson alleges that Musk and his companies “falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.”

Bloomberg explained that Johnson wishes to represent a class of people who lost money by trading Dogecoin since April of 2019.

He is asking that the court issue an injunction to block Musk as well as the named companies from promoting Dogecoin trading, an activity which Johnson asserts meets the definition of gambling under both federal and New York state law.

What’s more, Keith is also seeking a combined total of more than a quarter trillion dollars worth of monetary damages from the defendants.

The cryptocurrency-themed website CoinTelegraph pointed out in a piece published on Friday that this figure is “more than 34 times Dogecoin’s current market cap of $7.5 billion and nearly three times its all-time high (ATH) market cap of $88.68 billion in mid-2021.”

Musk revealed in May that Tesla and SpaceX merchandise can be bought with Dogecoin

Bloomberg noted that “Musk didn’t immediately respond to emails seeking comment on the suit” while requests for comment from SpaceX and Tesla also went unanswered.

Musk tweeted last month that both SpaceX and Tesla would soon begin accepting Dogecoin as payment from those purchasing merchandise from the company.

Musk later told one of his Twitter followers that “one day” Starlink customers may be able to pay for the satellite internet service using Dogecoin as well.

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