Elon Musk is being sued for $258 billion for allegedly running a Dogecoin pyramid scheme (Updated)

[BiG StroOnZ]

Summary

Elon Musk, Tesla, and SpaceX are being sued for $258 billion for supposedly running a pyramid scheme through the Dogecoin cryptocurrency. The lawsuit has been filed by Keith Johnson, who claims that Musk, SpaceX and Tesla were involved in a racketeering scheme that manipulated the price of the Dogecoin, and promote the coin as a legitimate investment. "Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all," the lawsuit reads. Notably, Johnson is going for class-action status on the suit and has intended to represent other investors who also believe that they have been illegally impacted by Musk. Johnson is seeking $86 billion in damages, paired with triple damages of $172 billion, equating to $258 billion. Furthermore, Johnson has requested that Musk and his two companies be prevented from promoting Dogecoin in any way.

 

 

 

Quotes

Quote

According to a Reuters report, the suit was filed by Dogecoin investor Keith Johnson, who accused Musk of using his wealth and position as CEO of the two companies to promote Dogecoin to drive up its price, before ultimately letting it fall.

 

"Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading," the complaint says. "Musk used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement."

 

Johnson wants Musk and his companies prohibited from promoting Dogecoin, and for trading Dogecoin to be declared gambling under federal and state laws. He also wants, again, $258 billion: $86 billion in actual damages, representing the loss of Dogecoin value since May 2021, plus a claim for treble damages.

 

Musk, who has long been accused of indirectly affecting the price of cryptos through his tweets, sent Doge skyrocketing in December 2020 with his "One Word: Doge" tweet. Musk pushed it higher in April last year when he called himself "The Dogefather," making Dogecoin the fourth largest crypto by market cap. Like other cryptos, Dogecoin is currently at its lowest price in years: $0.0571, a level it hasn't seen since April 2020. Its market cap is now $7.6 billion, and while that's no small figure, it's far from the $88 billion Doge reached at its peak.

 

My thoughts

I find this claim an interesting one because Dogecoin was introduced mainly as a joke and as a meme coin. Also, it should be noted that Musk isn't the only one who's been charged with fraud involving crypto. John McAfee was also charged with fraud involving multiple cryptocurrencies including Dogecoin. Regardless, I think calling this racketeering or a pyramid scheme is quite the far cry from reality. Lastly, the 258 billion dollar figure is astronomically insane. 

 

Sources

https://www.forbes.com/sites/billybambrough/2022/06/16/elon-musk-suddenly-hit-with-huge-258-billion-dogecoin-pyramid-scheme-lawsuit-amid-a-devastating-bitcoin-and-ethereum-price-crash/?sh=50028238e772

https://wccftech.com/the-258-billion-lawsuit-by-a-dogecoin-investor-against-elon-musk-tesla-and-spacex-has-only-a-slim-chance-of-succeeding-on-allegations-of-a-pyramid-scheme/

https://www.reuters.com/legal/transactional/elon-musk-sued-258-billion-over-alleged-dogecoin-pyramid-scheme-2022-06-16/

https://www.tweaktown.com/news/86914/elon-musk-hit-with-258-billion-lawsuit-for-racketeering-dogecoin/index.html

https://www.pcgamer.com/elon-musk-is-being-sued-for-dollar258-billion-because-of-dogecoin/

https://www.techspot.com/news/94980-elon-musk-tesla-spacex-face-258-billion-lawsuit.html

 

Small Update to this story ~

 

Summary

Elon Musk has taken to Twitter to publicly say that he is still a big supporter of the meme cryptocurrency Dogecoin despite the lawsuit:

 

Quotes

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The tweets from Musk come just after reports surfaced that revealed an individual has filed a lawsuit against Musk, Tesla, and SpaceX that claim all three were involved in a racketeering scheme that manipulated the price of Dogecoin.

 

Musk took to his personal Twitter account to write that he still supports Dogecoin, which was met with a reply from Altcoin Gordon, who wrote, "Keep buying it then." Musk quickly responded with, "I am"

 

Sources

https://www.tweaktown.com/news/86954/elon-musk-says-he-is-still-buying-his-favorite-cryptocurrency/index.html

[PeachGr]

I was thinking that everyone will get rich by crypto, how did that happen?

I guess they will also bet on sports, and sure the losing team if it costs them money

[jaslion]

I was wondering when this was gonna happen. I saw it coming the moment the first tweets happened :p.

[Fasauceome]

1 hour ago, BiG StroOnZ said:

Regardless, I think calling this racketeering or a pyramid scheme is quite the far cry from reality.

The trouble in getting these charges to stick is that legislation around crypto pretty much doesn't exist, pump and dumps are illegal for the stock market but not for crypto coins, as far as I'm aware. 

 

Best case scenario is new legislation begins to form that protects crypto investors in a similar fashion to stock market investors.

[Kisai]

19 minutes ago, Fasauceome said:

The trouble in getting these charges to stick is that legislation around crypto pretty much doesn't exist, pump and dumps are illegal for the stock market but not for crypto coins, as far as I'm aware. 

 

Best case scenario is new legislation begins to form that protects crypto investors in a similar fashion to stock market investors.

They don't have to be. It's illegal to market investments, securities or real estate and make promises of gains that are impossible. Like the entire thing about ponzi/pyramid scams is that there is never anything to liquidate when it goes bust.

[Beerzerker]

It's just someone being pissy about their own loss and trying to force someone else to "Pay".

Thing is crapto is just that - A risk like the stockmarket or anything else with absolutely NO guarantee of return or stability.
You invest, you run the risk of loss and that's just how it is.

And do note where the document says "It's simply a fraud whereby "Greater fools" are deceived into buying the coin at a higher price".
Well, if he knew that to state it in the document as said (Because he did), that already invalidates the suit filed.

And I love all the ways he described what Dogecoin "Is" and "Is not" meaning he HAD to have known before it all went down about it.

His investment, risk and loss are his alone and I can promise you this guy is probrably just as guilty of what he's accusing another of doing, just on a smaller scale and the amount he's trying to get via the suit (Which is beyond ridiculous) only proves it and his own greed too.

Definitely someone trying to use the legal system to get paid - Either that or there could be more of a political angle at work here, the collapse of it providing opportunity to try and take him down for such reasons AND get paid at the same time.

We'll have to sit back and watch what happens but I honestly think this one is gonna get laughed right out of the courtroom in the end.

[Arika]

can we sue everyone else that promotes a crypto-currency then, because crypto-currencies are a ponzi scheme and/or a pyramid scheme

[Needfuldoer]

16 minutes ago, Arika S said:

can we sue everyone else that promotes a crypto-currency then, because crypto-currencies are a ponzi scheme and/or a pyramid scheme

Right? You can find-and-replace "Dogecoin" with the name of any other cryptocurrency, and the "it's all a pyramid scheme" part of that diatribe still applies.

[justpoet]

This lawsuit should fail hard.  But if it doesn't, the same thing should be done to anybody who has ever promoted bitcoin and any other crypto.  There's no real monetary value backing any crypto currencies.  Even so called stable coin crypto currencies have proven to not be stable and truly backed.  Crypto only has value because people want it right now, not because there's anything of value backing it.

[CTR640]

"Hey everyone! There is a new joke and funny meme coin and that's Funny Monkecoin! Monkes are funny, fluffy and adorable and they can make you richt!"

 

And some braindead fools thinks you can get rich by investing in Funny Monkecoin and proceeds suing someone's ass because all money is lost...

 

$258 billion dollars...? Lol. More like, that fool lost 258 billions of braincells... Seriously, some people...

[Kisai]

1 hour ago, justpoet said:

This lawsuit should fail hard.  But if it doesn't, the same thing should be done to anybody who has ever promoted bitcoin and any other crypto.  There's no real monetary value backing any crypto currencies.

I doubt it will fail "hard", but I don't expect Tesla or SpaceX being involved in any recoupment of funds. Elon on the other hand, was warned, warned again, and still warned, and now the chickens have come home to roost.

 

You do not get out of liability going "it was a joke bruh"

[Quackers101]

at least dogecoin is maybe one of the best sh*tcoins, but still wouldn't trust any of them.

Do agree with how elon pushed this crap and on TV is something to sue over, to promoting scams.

how one would differentiate them? not sure, also the more active users a coin have the better like bitcoin.

[Spotty]

Elon: "it was actually a typo, I meant dog to the moon"

*Uses SpaceX launch a dog to the moon to avoid lawsuit*

 

In all seriousness though, did he actually give advice telling people to invest or make any promises that it would be an investment opportunity or promise any kind of returns?

Quote

 sent Doge skyrocketing in December 2020 with his "One Word: Doge" tweet

If people go out and buy crypto because some guy tweets the name of if then that's on them. 

[TetraSky]

Crypto losers are mad, eh.

Will they sue everyone else who promoted their get rich quick shitcoins that ended in a fire because they sold everything the moment it went up after their followers bought them?

They knew what they were getting into. Only got themselves to blame. Crypto is and always has been, a highly volatile invest at your own risk kind of thing.

[Beerzerker]

20 minutes ago, Kisai said:

I doubt it will fail "hard", but I don't expect Tesla or SpaceX being involved in any recoupment of funds. Elon on the other hand, was warned, warned again, and still warned, and now the chickens have come home to roost.

 

You do not get out of liability going "it was a joke bruh"

There is nothing to be liable for.
Regardless of what kind of crapto it is, the basics still apply in that it's a risk any and all "Investors" take when they get into it, doesn't matter how much or little they have at stake.
The risk and responsibility for it is 100% on the investor, plain and simple.

Doesn't help with the document submitted saying what it did about "Greater Fools" meaning the guy pushing this lawsuit was one too by their own admittance from the wording of it.

The judge will probrably look at it and determine like all the rest of the "Fools" that invested, he too has garnered the well deserved rewards of being a fool and only got a fool's reward like the rest did.

[Kisai]

14 minutes ago, Beerzerker said:

There is nothing to be liable for.
Regardless of what kind of crapto it is, the basics still apply in that it's a risk any and all "Investors" take when they get into it, doesn't matter how much or little they have at stake.
The risk and responsibility for it is 100% on the investor, plain and simple.

 

Investors have to be made aware of the risks. A Tweet is not a 300 page prospectus.

14 minutes ago, Beerzerker said:

Doesn't help with the document submitted saying what it did about "Greater Fools" meaning the guy pushing this lawsuit was one too by their own admittance from the wording of it.

 

Funny how people are only mentioning this after Bill Gates said exactly that.

https://www.cnbc.com/2022/06/15/bill-gates-says-crypto-and-nfts-are-based-on-greater-fool-theory.html

Quote

Bill Gates is not a fan of cryptocurrencies or non-fungible tokens.

Speaking at a TechCrunch talk on climate change Tuesday, the billionaire Microsoft co-founder described the phenomenon as something that’s “100% based on greater fool theory,” referring to the idea that overvalued assets will go up in price when there are enough investors willing to pay more for them.

 

 

14 minutes ago, Beerzerker said:

The judge will probrably look at it and determine like all the rest of the "Fools" that invested, he too has garnered the well deserved rewards of being a fool and only got a fool's reward like the rest did.

Nah. I no doubt something is coming down the pipeline to cost Elon, because he knowingly touted a scam. It may not be exactly this lawsuit though.

 

[Eaglerino]

do they think that suddenly a meme coin will become regulated because of a meme lawsuit

[Ultraforce]

2 hours ago, Arika S said:

can we sue everyone else that promotes a crypto-currency then, because crypto-currencies are a ponzi scheme and/or a pyramid scheme

I don't know if this lawsuit would be meritorious as Dogecoin isn't owned or operated by SpaceX or any of Elon Musk's companies, but I could see given that Elon Musk has been sued before about taking actions that are damaging to investors as well as false and misleading in relationship to his tweet to take Tesla private and Elon's tweets about the Tesla where he's broken the agreement that he signed after he settled with the SEC.

Like the guy is a crook, probably did insider trading and has done what probably was illegal market manipulation of his own company's stocks but I don't think that would work for dogecoin.

[wanderingfool2]

3 hours ago, Kisai said:

Nah. I no doubt something is coming down the pipeline to cost Elon, because he knowingly touted a scam. It may not be exactly this lawsuit though.

Well I mean it all depends.  If he believes in it, then it becomes a lot harder to claim it's a ponsi scheme.  It also is a bit of a tricky situation in that crypto can be viewed as an anti-establishment type of currency, one that can't be controlled by a government.

 

8 hours ago, BiG StroOnZ said:

Also, it should be noted that Musk isn't the only one who's been charged with fraud involving crypto

A more accurate wording is accused of instead charged with.  Charged implies a police investigation where something like the DA has laid charges.

 

3 hours ago, Beerzerker said:

The risk and responsibility for it is 100% on the investor, plain and simple.

Well I mean yes and no.  I do think that all investors should be educated regarding what they are about to buy.  They shouldn't go on a word of someone else, and specifically of someone who doesn't have direct dealings with the company/service/stock.

 

Where it falters is when statements are made by someone with authority (like a CEO or worker in the company) about the investment and people make decisions based on that.  e.g. Twitter stating that <5% bots (but if it turns out they intentionally mislead and the number is 15% it becomes less of the investor and more of the company).

 

In this case though, unless they show that he was literally inflating (and specifically selling at the highs) I think this should be open and shut.

[Beerzerker]

5 hours ago, Kisai said:

1: Investors have to be made aware of the risks. A Tweet is not a 300 page prospectus.
 

2: Funny how people are only mentioning this after Bill Gates said exactly that.

https://www.cnbc.com/2022/06/15/bill-gates-says-crypto-and-nfts-are-based-on-greater-fool-theory.html

 

 

3: Nah. I no doubt something is coming down the pipeline to cost Elon, because he knowingly touted a scam. It may not be exactly this lawsuit though.

 

As long as crapto has been around (10+ years at least) I'm not buying "They couldn't discover the risks for themselves" because that ain't true.

If they didn't at least bother to look into and investigate "What" crapto was for themselves that's on them, not Musk or anyone else. The info about crapto in any form is readily available in the public domain and so damned easy to find too with a simple Google search.

Since it's not real money (It's not legal tender) or regulated by law, there is NO legal requirement to inform anyone about it in any way.

I'm not playing the "Pass the blame game" like so many these days like to do.

If they decided to do it, it was them and them alone that is responsible in the end just like it would be for me if I was an investor.
No, I'm not a investor and knew better in the first place without having to research jack-dick about it.

It's simple common sense - You risk it, you could lose it just like in a casino.

BTW if you ever go into a casino and lose, do try that "You should have educated me about the risks of gambling" arguement with them and see how it works for you.
You'll get "Educated" alright..... You'll have a doctorate (In pain) and need a doctor too if you're lucky once that class is dismissed.

Also - Why am I getting the idea you've got something against Musk here?
U lose something too?

 If there is something else coming that's how it is but this one certainly doesn't hold water - There is NO regulation of it, legal things about it and so much for the "It's completely anomymous" arguement that used to be floated around being legit.
It's not regulated at all so no laws were broken - In reality there isn't much anyone can do about it.
Frivilous, money grab of a "Get-rich-quick" scheme lawsuit crapto is and plays to the get rich quick/E-Z money greed of a certain crowd.

[Kronoton]

Musk is clearly guilty as charged (yeah I know it's just a civil suit, but still) and won't have to pay anything beyond what his lawyer charges.

 

White collar crimes at this scale never get punished unless you get as stupid/greedy as Madoff and screw members of the 1%.

[lewdicrous]

8 hours ago, Arika S said:

can we sue everyone else that promotes a crypto-currency then, because crypto-currencies are a ponzi scheme and/or a pyramid scheme

My guess is that it might depend on the outcome of this case and whether or not said outcome is precedential.

[Beerzerker]

1 hour ago, Kronoton said:

Musk is clearly guilty as charged (yeah I know it's just a civil suit, but still) and won't have to pay anything beyond what his lawyer charges.

 

White collar crimes at this scale never get punished unless you get as stupid/greedy as Madoff and screw members of the 1%.

I'll make things clear on my part - I'm not saying Musk didn't do anything he's accused of, it's the simple fact there are no laws regulating it and it's not legal tender currency so no actual crime by law was commited, whether he did or not.

You may as well sue someone everytime you lose a game of Monopoly, it's really that kind of thing.

I'll also make it clear this Johnson guy probrably would have done the same himself if he were able - Yes he probrably would have if he could so bear that in mind.

Guys playing the crapto game, Johnson included aren't in it for fun, they are really trying to get rich quick by doing it and will take any advantage they can get to win - But folks seem to have a problem personally with Musk doing the same thing and actually being successful in doing it himself.

How would it be seen if Gates or Buffet had done it instead?
Those guys are "Heroes"..... Or are they?

The guy filing the suit just had the misfortune of not being able to cash in himself by playing the game and instead took the fall like so many others did, so now he's trying to make Musk pay for his own personal benefit.

The fact it's a class-action lawsuit only proves to me by suing on "Behalf" of other investors, this is nothing more than an angle to legitimize such a suit with his lawyers and himself getting the lion's share of any payout awarded with the rest getting what amounts to a pittance of stale bread crumbs.... If that really.

It's simple, pure unadulterated greed in play and that's the root of it.
 

[Sauron]

I hope he's found guilty, though I don't think it's likely.

8 hours ago, Spotty said:

If people go out and buy crypto because some guy tweets the name of if then that's on them. 

Except not really because the guy in question has the money to single handedly pump the coin, plus the ability to increase its value by making it a means of payment for his companies' products and insider information on whether that will be the case.

 

You could say this of virtually all scams and ponzi schemes, you very rarely see someone committing these promises to a contract or anything legally binding... exploiting gullible people for personal profit is still a crime.

[mr moose]

If this fails it will not be because of any legitimacy of the coin, fairness or falsehood in the accusation, perceived craziness of the loser or anything like that.  It will fail simply because the US government has too much money tied up in spaceX and the bankruptcy of telsa along side further public loses in crypto will not help the economy.  

 

Just on crypto unrelated to this suit,  There are way more losers in crypto (not just investors, but collateral damage to everyday people as well from increases int he cost of electricity and PC parts) than there are people getting rich.