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Price crash: US investors drag Elon Musk, Tesla and SpaceX to court over alleged Dogecoin pyramid scheme | news

In a lawsuit filed in a New York court on Thursday (local time), Keith Johnson accuses Musk and his companies of being part of an illegal Ponzi scheme that raised the price of Dogecoin and then collapsed. Johnson is seeking a class action lawsuit for anyone who has wagered money with Dogecoins.

The actor accused Musk of presenting Dogecoin as a legitimate investment when it had no value. He wants Musk and his companies to pay three times for all alleged losses in value suffered by Dogecoin holders since 2019, bringing the total to $ 258 billion. In addition, the accused should bear the legal and court costs. It remains to be seen whether and to what extent the case will be upheld. Musk and his company did not initially comment on the allegations.

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Dogecoin is a digital currency that has existed since 2013 and is based on the Internet phenomenon turned into a funny image of some kind of Japanese dog, which should have been a joke. Driven by celebrities like Musk, followed by a whopping 98 million Twitter user accounts, it temporarily transformed into one of the hottest speculative objects in the financial market in 2021 and hit a record 74 cents in May. More recently it was only worth about 5 cents. Musk is the richest person in the world, according to Forbes, with an estimated fortune of around $ 200 billion.

In the general wave of market selling, the cryptocurrency market has recently collapsed due to fears of inflation and recession. Not only Dogecoin, but also more established and larger cyber assets like Bitcoin or Ether have lost tremendously in value. Critics of Dogecoin have long warned of trends towards a Ponzi scheme, where profits are only possible through new funds from new investors. Famous cryptocurrency fans have also had their doubts. Bitcoin billionaire Mike Novogratz said in 2021: “It’s dangerous

– if the enthusiasm wears off, it could go down steeply “.

/ hbr / DP / mis

NEW YORK (dpa-AFX)

Bildquellen: CKA / Shutterstock.com, Bill Pugliano / Getty Images

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