Investors have claimed that Tesla and Twitter CEO Elon Musk ran a pyramid scheme to boost the price of the popular Dogecoin cryptocurrency, and are suing Musk for $258 billion in damages.
The Independent reports that Elon Musk, the CEO of SpaceX, Tesla, and Twitter, is being sued for $258 billion for racketeering. According to the lawsuit, Musk purposefully artificially inflated the price of the cryptocurrency Dogecoin. The cryptocurrency’s coin price has increased this week after Musk changed the Twitter “bird” logo on the platform’s homepage to the Dogecoin mascot.
The plaintiffs in the lawsuit allege that Musk raised the price of Dogecoin by “more than 36,000% over two years and then let it crash” by using his social media accounts and an appearance on Saturday Night Live. The filing further alleges that Musk “used his pedestal as World’s richest man to operate and manipulate the Dogecoin Pyramid Scheme.”
Musk’s lawyers have dismissed the allegations as a “fanciful work of fiction” based on “innocuous and often silly tweets” about the cryptocurrency. “There is nothing unlawful about tweeting words of support for, or funny pictures about, a legitimate cryptocurrency,” they said. “This court should put a stop to plaintiffs’ fantasy and dismiss the complaint.”
Dogecoin, which was invented as a joke in 2013, gained popularity in the last few years. The price of the cryptocurrency with a meme-inspired design peaked in May 2021, following which it suffered significant losses. Despite the losses, Dogecoin still has a market cap of over $10 billion, placing it among the top 10 most valuable cryptocurrencies.
Along with Bitcoin and Ethereum, Musk has previously disclosed that Dogecoin is one of the three cryptocurrencies he owns. In a 2021 interview with Time, Musk asserted that Dogecoin had the sound financial foundation to function as a widely accepted form of money. “Even though it was created as a silly joke, dogecoin is actually better suited for transactions [than bitcoin],” he said. “It is slightly inflationary… but that’s actually good as it encourages people to spend rather than to hoard it as a store of value.”
Musk has continued to support Dogecoin despite the lawsuit. He declared in June 2022 that he would hold onto his Dogecoin investments regardless of price changes. He tweeted, “I will keep supporting dogecoin,” and then told a follower he would “keep buying it.”
The lawsuit against Musk serves as a reminder of the increased scrutiny U.S. regulators are giving cryptocurrencies and prominent supporters. While the cryptocurrency industry is still largely unregulated, regulators are starting to pay more attention. The Securities and Exchange Commission (SEC) chairman, Gary Gensler, recently called for more cryptocurrency market regulation.
Read more at the Independent here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan