Elon Musk, SpaceX, and Tesla are being sued for $258 billion in a 'Pyramid Scheme' including Dogecoin

Plaintiff Keith Johnson, who bought Dogecoin in 2021, has filed a lawsuit against Elon Musk, SpaceX and Tesla in the Southern District of New York, wanting at least $86 million in losses.

Johnson claims that Musk's tweets concerning Dogecoin drove up the price, when in reality the cryptocurrency has no "underlying value," and that Musk endorsed it for personal "profit, exposure, and amusement."

Under federal and New York law, Johnson is also advocating that the court prohibits Musk from trying to promote Dogecoin and declaring Dogecoin buying and selling a gambling game.

“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” Johnson said in his complaint, filed Thursday in federal court in Manhattan.

The lawsuit states that, “defendants falsely and deceptively claim that dogecoin is a legitimate investment when it has no value at all.”

“Since defendant Musk and his corporations Spacex and Tesla Inc. began purchasing, developing, promoting, supporting, and operating dogecoin in 2019, [the] plaintiff and the class have lost approximately $86 billion in this crypto pyramid scheme.”

Dogecoin's value has fallen over the last year, falling to $.057 per coin on Thursday from a high of $.64 in May. In 2013, the digital currency was launched at a price of $.0002 per coin. Musk began promoting Dogecoin three years ago with a series of social media posts that included the words "DOGE" and "Tesla merch buyable with Dogecoin," both of which helped to boost the value of the cryptocurrency. Musk reversed his support in February 2021, tweeting, "I will literally pay actual $" to persons who disable their Dogecoin accounts.

Musk's tweets about Dogecoin prompted the Securities and Exchange Commission to open an investigation into him that month.

According to the complaint, Dogecoin's drop in prices started from around time Musk hosted the NBC program "Saturday Night Live" and called Dogecoin "a scam" while playing a bogus financial advisor on a "Weekend Update" skit. This was contrary to when Tesla announced in February 2021 that it had purchased $1.5 billion in bitcoin and would accept it as payment for vehicles for a limited time.

The case is Johnson v. Musk et al, U.S. District Court, Southern District of New York, No. 22-05037.