It’s been a rough few months for the Crypto community. Reaching all-time highs in late 2021, prices have since crashed, leaving many investors searching for answers. One of the most influential names in the digital currency space is Elon Musk, the tech billionaire (and current world’s richest man) who would commonly impact the rise and fall of prices with a single tweet. However, a disgruntled investor in the cryptocurrency Dogecoin recently filed a USD$258 billion (AUD$367 billion) lawsuit against the business magnate and his companies, Tesla and SpaceX, claiming to be a victim of what he called Musk’s “Crypto Pyramid Scheme”.
Keith Johnson, who says he lost money after investing in Dogecoin, is asking for his motion to be classified as a class-action suit on behalf of those who have suffered losses. Mr Johnson believes investors have lost around USD$86 billion since Musk began promoting the cryptocurrency and now requests Musk reimburse investors this sum, plus pay double that in damages.
Founded in 2013, Dogecoin was created by software engineers Billy Markus and Jackson Palmer, who decided to make a payment system as a “joke”, mocking the wild speculation in cryptocurrencies at the time. Importantly, co-creator Palmer has been equally as vocal in his displeasure at the coin’s growth, labelled it the ‘worst parts of capitalism’. Today, it’s considered the OG “meme coin” and, more specifically, the first “dog coin”. Its price traded at just fractions of a cent for most of its existence but saw a giant leap at the end of 2021, rising to USD$0.73 in may of that year, amid the GameStop saga and numerous social media posts about it from Musk. Yet today, it sits at just USD$0.063.
Tesla merch can be bought with Doge, soon SpaceX merch too
— Elon Musk (@elonmusk) May 27, 2022
Keith Johnson says Musk increased “the price, market cap and trading volume of Dogecoin” by promoting it. Within the lawsuit, Johnson has provided numerous Twitter posts from the billionaire, including one saying SpaceX would “put a literal dogecoin on the literal moon”. The spacecraft manufacturer was also included for having named one of its satellites after Dogecoin. Additionally, Tesla was named in the suit as Musk allowed Dogecoin to be used as payment for its electric vehicles.
Since the currency has no intrinsic value and isn’t a product, Mr Johnson has compared Dogecoin to a pyramid scheme. Furthermore, there’s an infinite supply of coins, and it isn’t backed by a tangible asset, which is strangely similar to our current fiat system. However, that’s a discussion for a different day. The moral of the story is: do your research, folks.