Musk is accused of promoting bitcoin and is being sued for $258 billion in damages.
If you’re significantly engaged in dogecoin, it’s either because you’re a very-online crypto day trader eager to spend money on exciting, speculative ventures, or because you’re a die-hard devotee of Elon Musk. An investor is now suing Musk and his firms Tesla and SpaceX, alleging that he was involved in a conspiracy to artificially inflate the value of dogecoin.
Keith Johnson, an investor, claims to be representing a group of people who were tricked into purchasing the currency after Musk claimed it had legitimate worth. The lawsuit demands $258 billion in damages and would require Musk, Tesla, and SpaceX to stop promoting the cryptocurrency.
The online brand of Dogecoin is inextricably linked to a type of absurdist, insider internet culture that thrives on Twitter and Reddit. Musk, dubbed “Technoking,” is in the same boat. So it was no surprise when Musk started tweeting about Dogecoin. DOGE began as a utility-free memecoin, and Musk is known as the “meme king” among his online admirers. Last May, the value of Dogecoin reached about $89 billion, just before Musk hosted “Saturday Night Live” and made a joke about the cryptocurrency.
Many of Musk’s fans joined him in investing. When Glauber Contessoto, a self-described “dogecoin billionaire,” told the Daily how he came to own over $1 million in DOGE — an investment that has now plummeted to the point where he now says he “regrets everything” — he said he was mostly motivated by Musk. “Elon sends out a barrage of eight, nine, or ten tweets, all at once, and… This is it, I’m thinking. He told the New York Times podcast, “This is the blast-off.”
According to the lawsuit, such tweets weren’t just jokes, but harmful investment advice. Musk claimed that dogecoin was more beneficial for actual purchases than bitcoin, and that he was investing in the cryptocurrency on behalf of his son X A-Xii. Customers were able to use DOGE to purchase Tesla and SpaceX products.
These actions, paired with tweets and interviews reasserting his faith in the token, went too far, according to the lawsuit’s complainant. According to the complaint, “Defendants falsely and deceptively represent that dogecoin is a legitimate investment when it has no value at all.”
The case has the potential to set a precedent that will make other high-profile figures nervous. In the last year, celebrities ranging from Kim Kardashian to Larry David have endorsed cryptocurrencies, and the price has plummeted.
