Tesla CEO Elon Musk is arguably one of the world’s most prominent crypto influencers, with each Tweet setting the social media platform abuzz, particularly when it comes to Dogecoin. Last December, Musk’s electric vehicle company Tesla began accepting Dogecoin for merchandise, and last June, he urged the cryptocurrency to reduce its transaction fees.
Indeed, the billionaire is so closely associated with the memecoin that Musk’s Twitter takeover bid alone resulted in a 10% jump in Dogecoin’s price.
But that is also landing Musk in hot waters. On Thursday, U.S. citizen Keith Johnson told a federal court in New York that he was defrauded by Musk and his companies SpaceX and Tesla in a Dogecoin “pyramid scheme,” which he claims involved Musk boosting the memecoin’s price through dishonest and illegal practices.
“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” Johnson told the court.
The class-action lawsuit is attempting to recoup Johnson’s losses since April 2019, as well as that of other Dogecoin investors. The group, led by Johnson, is asking for Musk and his companies to pay $86 billion in damages, along with $172 billion in triple damages for their role in the scheme.
The lawsuit also demands that Musk and his companies cease promotion of Dogecoin and also asks New York to declare the trading of Dogecoin “gambling.”
Musk, for his part, denies his role in shaping crypto markets. “Markets move themselves all the time,” he told TIME, “based on nothing as far as I can tell. So the statements that I make, are they materially different from random movements of the stock that might happen anyway? I don’t think so.”
Earlier this month, SpaceX employees also collectively drafted a letter to the company critical of Musk’s Twitter missives, claiming “every Tweet that Elon sends is a de facto public statement by the company.”
“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter said. “As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every Tweet that Elon sends is a de facto public statement by the company. It is critical to make clear to our teams and to our potential talent pool that his messaging does not reflect our work, our mission, or our values.”
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