Elon Musk and his companies are being sued by a group of crypto investors for building a pyramid scheme to manipulate the price of Dogecoin over the past few years. In the lawsuit, the plaintiffs accuse the billionaire, SpaceX, Tesla, The Boring Company and other groups of using their influence to fluctuate asset values according to their interests in order to generate long-term profits. term.
A pyramid scheme?
The Dogecoin case took on more serious proportions when investor Keith Johnson filed a lawsuit against Elon Musk and his companies for promoting the asset with the aim of getting it adopted by millions of investors.
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According to the document, the famous American businessman has spoken highly of cryptocurrency while using his reputation since the beginning of 2021. “ Elon Musk used his notoriety as the richest man in the world to exploit and manipulate the Dogecoin pyramid scheme for profit, exposure and amusement “, he specifies. In fact, Elon Musk announced in a tweet the acceptance of Dogecoins as a means of payment for Tesla derivatives. This statement led to the sharp and sustained growth in the price of digital currency for months.
The situation is all the more critical when in May 2021, the CEO insulted Dogecoin by calling it a “scam” during his appearance on the cult show Saturday Night Live. After this declaration, the price of the cryptocurrency suddenly collapsed until it reached less than 10% of its highest historical value.
Today, new plaintiffs join Keith Johnson in the case to seek $258 billion in damages from Elon Musk, Tesla, SpaceX, The Boring Company and other companies involved in this pyramid scheme dressed as false promotion. A lawsuit filed Tuesday in federal court in Manhattan says these actors drove the price of Dogecoin up more than 36,000% over two years before letting it crash.
An important figure in the crypto landscape
Elon Musk’s discourse changes on Dogecoin and the impacts they had reflect the character’s enormous influence on the crypto market. In this perspective, the plaintiffs ask that his companies be prohibited from promoting Dogecoin so as to prevent impulsive investments in the future.
In May 2021, the United States FTC (Federal Trade Commission) revealed that scammers used the image of Elon Musk to trick crypto users into investing in a new altcoin, which turned out to be a scam . This technique allowed them to collect 2 million dollars in cryptocurrency.