The plaintiffs argued that Elon Musk and defendants intentionally drove the price of Dogecoin higher knowing all along that the currency lacked intrinsic value and that its value “depended solely on marketing”.
Elon Musk has been facing a major lawsuit for shelling heavy support to memecoin Dogecoin. The world’s richest man is facing a $258 billion racketeering lawsuit that accuses Musk of running a Dogecoin pyramid scheme.
Lawsuit for Supporting Dogecoin
In a recent development, seven new investor plaintiffs have joined with six new defendants, including his tunnel construction business boring company. The new amended complaint filed in the Manhattan federal court on Tuesday, September 6, shows that Elon Musk and his group of companies – Tesla, Boring Co., and SpaceX – intentionally drove the price of Dogecoin by more than 36,000% every two years before allowing it to crash.
Earlier in June 2022, Dogecoin investor Keith Johnson had filed a $258 billion class-action lawsuit against Musk. He accused Musk of running a Dogecoin pyramid scheme and heavily promoting the memecoin. The lawsuit filing accuses Musk of advertising Dogecoin as a “legitimate investment” through his social media profiles and artificially inflating the DOGE price.
It also accuses all the defendants of earning billions by promoting Dogecoin. The amended complaint also noted that He also noted that “people that work around the factory at SpaceX or Tesla” asked him for that support.
In addition to seeking monetary compensation, Johnson also wants to block Musk and his group of companies from promoting the memecoin further. However, Elon Musk said that he would keep supporting Dogecoin.
The DOGE Price Rally
During the first half of 2021, Dogecoin experienced a solid rally taking it into the ranks of the top ten cryptocurrencies by market cap. Experts believe that the success of the memecoin has been due to the constant Tweets by Elon Musk.
In fact, Elon Musk also believes that Dogecoin is better than Bitcoin in handling a lot of transactions. In one of his latest interviews on the Full Send Podcast, Musk said: “I think actually weirdly even though Doge was just designed to be like this ridiculous joke currency, but the actual total transactional throughput capability of Doge is much higher than bitcoin.”
The other defendants in the case include the Dogecoin Foundation, the non-profit providing governance. Interestingly, the $258 billion in damages is three times the estimated decline in DOGE’s market cap decline this year.
Along with the broader crypto market, Dogecoin has faced intense selling pressure and DOGE is currently trading at a price of $0.06 with a market cap of $8 billion.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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