Prominent entrepreneur Elon Musk and his companies SpaceX and Tesla are being sued in a class action lawsuit for $258 billion in damages for “participation in a crypto pyramid scheme” in connection with Dogecoin (DOGE).
The damages sought are 34 times the current market cap of the hoax cryptocurrency – which stands at $7.5 billion – and nearly triple the market cap during the record high of $88.68 billion that was reached in mid-2021.
The class action lawsuit, filed in New York by law firm Evan Spencer Law, argues that Musk “used his reach as the world’s richest person to gain profit, attention and entertainment from the Dogecoin pyramid scheme.”
According to the official court document, lead plaintiff Keith Johnson accuses the entrepreneur and his companies of “unlawfully enriching themselves” by US$ 86 billion. The charges range from fraud to illegal gambling operations.
According to Johnson, he and his fellow plaintiffs lost nearly $86 billion between May 2021 and June 2022. Accordingly, they are reclaiming that amount plus $172 billion in additional compensation payments and lost profits:
“Defendant Musk, self-identifying as ‘Dogefather’ and ‘former CEO of Dogecoin’, acts as a shareholder, spokesperson and promoter of Dogecoin, which has amassed a ‘Doge Army’ comprised of his own companies as well as several well-known billionaire influencers and celebrities are to boost the price, market cap and trading volume of the Dogecoin.”
In January, Musk announced that his car company Tesla would introduce the DOGE as a means of payment for the company’s fan merchandise. In May, the Dogecoin was also integrated into SpaceX as a payment method for merchandise.
The class action lawsuit also seeks to have trading in Dogecoin classified as gambling in New York and at the federal level. As a result, the lawsuit argues that Musk and his companies consequently violated applicable gambling laws:
“Because plaintiff and co-plaintiffs were not warned prior to trading the Dogecoin that it was nothing more than gambling, plaintiff and co-plaintiffs are seeking a refund of all stakes lost as a result of trading Dogecoin.”
In addition, Musk, his companies and all other persons without a valid license should be prohibited from advertising the Dogecoin in any form in the future.
Community reacts mockingly
Meanwhile, the crypto community showered the class action lawsuit with ridicule and malice.
For example, pseudonymous Dogecoin creator Shibetoshi Nakamoto, whose tweets are cited as evidence in the lawsuit, says the prosecution is “immeasurably stupid,” though he concedes that cryptocurrency trading is also a form of gambling.
i mean dogecoin is the same as everything else, they wanna make all crypto into gambling?
the lawsuit is obviously stupid as fuck, but i don’t think crypto trading is much different than gambling
— Shibetoshi Nakamoto (@BillyM2k) June 16, 2022
Rahul Sood, the CEO and co-founder of Irreverent Labs, also dismissed the lawsuit as a “dumb class action.” To that end he states:
“Incredible that such a stupid class action lawsuit can be filed in the US. All of these people knew what they were getting themselves into. Ridiculous.”
Attorney Ron Coleman of the law firm Dhillon Law Group admits in discussing the strange procedure concernsthat “in principle anyone can assert anything in a court case”.
Anyone can say anything in a law suit
— Ron Coleman (@RonColeman) June 16, 2022
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