Elon Musk is being sued by an US investor over the alleged manipulation of Dogecoin or the DOGE cryptocurrency.
A complaint made in a New York court claims that Musk, the CEO of Tesla and SpaceX and the world’s richest man, ran a pyramid scheme promoting DOGE for his own personal gain.
Keith Johnson, who filed the lawsuit, says he lost money after investing in Dogecoin and had been scammed by a "Crypto Pyramid Scheme."
Johnson is suing Musk for damages of US$258bn (£209bn), which he says represents the US$86bn decline in the value of DOGE since Musk started tweeting about it plus double that amount in damages.
Claiming to be “An American citizen who was defrauded”, Johnson wants his writ to be ruled a class action for those who have lost money through DOGE since 2019 and for Musk to reimburse them
What is Dogecoin?
Even by crypto standards, DOGE has an unusual pedigree.
Launched in 2013 as a joke to mimic Bitcoin with a Shiba Inu dog as its meme, Dogecoin’s value surged last year after regular tweets from Musk and other celebrities.
At its peak in May 2021, its price soared to US$0.74 or a jump of around 18,000% in four months and shortly before Musk famously described DOGE as a "hustle" on an episode of Saturday Night Live, a US comedy show.
Since then, it has been all downhill with its value falling by more than 90%.
According to the lawsuit, "Musk used his pedestal as the world's richest man to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and amusement," adding that the cryptocurrency "has no value at all”.
Tesla does allow people to buy its merchandise using Dogecoin but not its cars.
Musk is currently in the process of taking over Twitter where he is also being sued, this time by its shareholders who allege he has used tweets to manipulate the social media group’s share price to get a better deal.