Elon Musk, Tesla, and SpaceX are being sued for $258 billion (yes, billion) for running a pyramid scheme using the Dogecoin cryptocurrency. According to Reuters, the lawsuit was launched by Dogecoin investor Keith Johnson, who accused Musk of using his money and position as CEO of the two firms to promote Dogecoin in order to build up its price before letting it sink.
According to the complaint, "Defendants were aware since 2019 that Dogecoin had no value yet marketed Dogecoin to profit from its trade." "Musk exploited his position as the World's Richest Man to profit from, expose, and entertain himself by operating and manipulating the Dogecoin Pyramid Scheme."
Dogecoin was first created in 2013 as a joke, but since there is no such thing as satire in capitalism, it quickly became the first meme coin and a legitimate (in the sense that they exist) cryptocurrency. Its value had been stagnating near zero for years until Musk tweeted about it in late 2020, causing a significant increase in price. Following tweets in 2021 pushed it even higher; it peaked in May 2021 at $0.74, but has since plummeted, losing more than 90% of its value, and is now trading at around $0.06.
Surprisingly, the lawsuit says that the Dogecoin dump began when Musk hosted Saturday Night Live in May 2021: Musk made an appearance as a guest on Weekend Update.
Johnson wants Musk and his firms barred from promoting Dogecoin, as well as trading Dogecoin to be classified as gambling under federal and state law. He also demands $258 billion, which includes $86 billion in real damages for the loss of Dogecoin value since May 2021, as well as a triple damages claim. It sounds like a long shot—filing a lawsuit is a long way from winning (or even having one heard), and even if Johnson wins, Musk is wealthy, but not that wealthy—but if you're going to take a chance, you might as well aim high.
Musk isn't the only well-heeled individual who has gotten in trouble for endorsing Dogecoin. In 2021, John McAfee, a former anti-virus guru, was charged with fraud.
Andy Chalk is a writer and a musician. Andy has been playing computer games since he was a child, starting with text adventures and rudimentary action games on a cassette-based TRS80. He went on to run a local BBS, learn how to build PCs, and develop a long-standing passion of RPGs, immersive sims, and shooters during the glory days of Sierra Online adventures and Microprose simulations. He started writing gaming news for The Escapist in 2007 and stayed there until 2014, when he joined the illustrious ranks of PC Gamer. He covers everything from new game announcements to patch notes, as well as legal wranglings, Twitch beefs, esports, and Henry Cavill. There's a lot of Henry Cavill.
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