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Elon Musk Sued For Billions Over Running Alleged Dogecoin Pyramid Scheme For 'Profit, Exposure and Amusement' The Tesla and SpaceX CEO is being sued over claims of 'a crypto pyramid scheme.'

By Madeline Garfinkle

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Elon Musk, CEO of Tesla and SpaceX, is being sued for over $200 billion.

The plaintiff, Keith Johnson, claims that Musk, along with his companies, "are engaged in a crypto pyramid scheme by way of dogecoin cryptocurrency."

Johnson alleges Musk illegally promoted dogecoin "falsely and deceptively" as a viable investment, when, in reality, the currency had "no value at all." Johnson accused Musk and his companies of racketeering by driving up the price of dogecoin while knowing it reflected no value.

Related: Musk Says Tesla Will Accept This Crypto Coin, Sends Valuation Skyrocketing

At its peak in May 2021, Dogecoin was trading at about 74 cents. As of Thursday afternoon, it's tumbled to around 5.8 cents.

The lawsuit claims that dogecoin "doesn't pay interest or dividend," and claims it has no unique utility "compared to other cryptocurrencies…It's not secured by a government or private entity." The complaint goes on to say that Musk used his power and recognition to "operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement."

Johnson is asking for $86 billion in damages plus $172 billion for losses incurred trading Dogecoin since 2019. Additionally, the lawsuit insists that Musk and his companies stop promoting the currency.

Musk, whose net worth is about $200 billion, according to Forbes, has yet to respond to the lawsuit. However, in the wake of dropping bitcoin value, Musk tweeted earlier this week "Cryptonight," as bitcoin fell to its lowest level since 2020.

Related: Elon Musk Continues to Back Dogecoin Over Its Competitors: Should You Take a Chance on the Meme Crypto

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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