The lawsuit was filed by Keith Johnson, an investor who says he and others lost money on Dogecoin because of the actions of three defendants who inflated the cryptocurrency’s value, then let it collapse.
Johnson described himself as “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme.” He said the “defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.”
The suit, filed on Thursday in a US federal court in New York City, seeks to represent a class of people who have lost money trading in Dogecoin since April 2019. The plaintiffs are demanding $86 billion in primary damages and so-called triple damages of $172 billion. They also want an order blocking Musk and the two companies from promoting Dogecoin, and a declaration that trading in the cryptocurrency constitutes gambling under US and New York State law.
At the time of publication, Bloomberg said neither Musk nor SpaceX and Tesla responded to its requests for comment.
Dogecoin was trading on Thursday at about 5 cents, down some 67% since the start of 2020. It had rallied to as high as 74 cents last year as Musk tweeted in favor of the coin. It subsequently gave up most of its gains after the billionaire turned sour on the coin, describing it as a “hustle” on a live talk show. A hustle refers to a scheme used to fraud.
Musk is the world’s richest man based on his holdings of the super-valuable Tesla stock.