Dogecoin investor sues Elon Musk for US$258 billion. Here’s why

asx company executive with multiple fingers all pointing at him

asx company executive with multiple fingers all pointing at him

The Dogecoin (CRYPTO: DOGE) price is down 10% since this time yesterday, currently trading for 5.5 US cents.

That puts the Shiba Inu themed crypto, often touted by Elon Musk, down 68% in 2022 and down a painful 93% since its all-time high of 73.8 US cents, reached on 8 May 2021.

At the current price, Dogecoin has a market cap of US$7.3 billion.

With the overnight losses, that’s now down more than US$86 billion from the total market valuation at its peak.

Now disgruntled US crypto investor Keith Johnson, who claims to have lost money investing in the crypto, wants Musk and the companies he founded, Tesla Motors (NASDAQ: TSLA) and SpaceX, to stump up for that loss of US$86 billion, plus double that again in punitive damages.

Dogecoin, Musk and a whopping lawsuit

As Reuters reports, the complaint, filed in federal court in Manhattan New York, accuses Musk and the two companies of racketeering for hyping Dogecoin and driving the price higher, then letting it crash.

The complaint states:

Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World’s Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement.

The US$258 billion in damages Johnson is seeking equate to an estimated three times the meme coin’s losses since May 2021.

Atop the damages, Johnson is seeking to legally prevent Musk from promoting Dogecoin and wants trading in the token declared to be gambling under both Federal and New York state laws.

Has the world’s richest man influenced prices?

Earlier in 2021, Musk tweeted that Tesla would allow customers to pay for merchandise using Dogecoin. The token soared in the hours following that tweet but gave back most of those gains almost as quickly.

Musk has mentioned the token more often in tweets, but it’s his Saturday Night Live appearance later in 2021 that is also named in the complaint. During the show, the billionaire made several jokes about Dogecoin. The price dropped more than 20% after the airing.

According to the lawsuit, the meme token came under pressure after Musk hosted “Saturday Night Live and, played a fictitious financial expert on a Weekend Update segment, called Dogecoin ‘a hustle’.”

Lawyers for Tesla, SpaceX, Musk and Johnson have not yet responded to media requests for comments.

The post Dogecoin investor sues Elon Musk for US$258 billion. Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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