An investor, who lost money by betting on dogecoin, a parody cryptocurrency inflated in particular by the interest of Elon Musk, filed a lawsuit claiming 258 billion dollars from the billionaire. Tesla and SpaceX are also targeted by the complaint.
The complainant describes himself as an “American citizen who was defrauded by a pyramid scheme around dogecoin set up by the defendants”. He is asking that his complaint, filed Thursday 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 (FRF 83 billion), he estimates. He claims reimbursement of this sum and double in damages, or 172 billion.
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An ironic cryptocurrency
Created in 2013, dogecoin was an ironic response to the two Internet phenomena of the year: cryptocurrencies, which were proliferating in the wake of bitcoin, and montages of a photograph of a Shiba Inu dog that was very popular on the Internet.
The price of dogecoin has moved below a penny for the majority of its history. But boosted by a certain buying frenzy around improbable values at the start of 2021 as well as by Elon Musk’s multiple messages on Twitter, dogecoin soared to more than 70 cents in May 2021.
It then began to back down soon after a satirical show aired, in which Elon Musk called virtual currency a “scam” in a sketch. It evolved Thursday at less than 6 cents.
The plaintiff includes in its petition 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 the 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.
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