Elon Musk Sticks By Dogecoin Despite $258 Billion Lawsuit

By now it seems like getting sued is just business as usual for Elon Musk. The latest is a class action brought by Dogecoin investor Keith Johnson on June 16 in a Manhattan federal court. In suing Musk, along with Tesla and SpaceX, Johnson argues that all three co-defendants engaged in racketeering and ran a pyramid scheme to garner investments in the cryptocurrency. (Musk is CEO of both companies.)

The suit seeks in damages triple the $86 billion that Dogecoin has lost in market value since May 2021, or $258 billion. In addition, Johnson wants Musk, Tesla, and SpaceX blocked from promoting Dogecoin, and he wants trading of the cryptocurrency labeled as gambling under both New York and federal law. On July 5, Dogecoin was trading at just under 0.07 cents, having fallen over 90% from its May 2021 peak of about 0.74 cents.

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In the words of the complaint, “Defendants were aware since 2019 that Dogecoin had no value yet promoted Dogecoin to profit from its trading. Musk used his pedestal as World’s Richest Man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure, and amusement.” No response was forthcoming from Johnson’s lawyer when asked what specific evidence Johnson has or expects to have to support these claims.

Just two days after the suit was filed, Musk tweeted, “I will keep supporting Dogecoin.” In an interview with Bloomberg three days after that (June 21), he added, “When I walk around the factory at SpaceX or Tesla, they’ve asked me to support Dogecoin, so I’m doing so.”

In some quarters, Musk is referred to as “The Dogefather,” and a deep-fake video that circulated on the internet purported to show the businessman promoting a cryptocurrency platform producing 30% returns on crypto deposits. In a Twitter response to that video, Musk declared, “Yikes. Def not me.”

This is all occurring while cryptocurrencies Bitcoin and Ethereum continue to lose value and crypto bank Celsius has stopped transactions. Still, some crypto entrepreneurs responded to the class action suit with ridicule.