With the federal government investigating Tesla’s full-self driving program over crashes, a muck racking website claiming to have evidence the car company has padded sales numbers, and SpaceX employees asking management to condemn Elon Musk’s behavior, the wealthiest man in the world is certainly seeing his problems stack up.
And now the billionaire has got another one. Decrypt reports on a lawsuit filed against Musk, SpaceX and Tesla seeking $285 billion in damages:
Bloomberg today reported that an American citizen is suing the world’s richest man for allegedly pumping Dogecoin. The lawsuit alleges that Musk was part of a racketeering scheme to back the cryptocurrency.
“Defendants falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all,” Keith Johnson, who filed the lawsuit, said in the complaint. Johnson is seeking class-action status for the suit and aims to represent other allegedly harmed investors.
Dogecoin was originally designed in 2013 as a joke and to poke fun at Bitcoin. But it went from being an obscure “meme coin” to arguably the most talked about digital asset in the space during 2020 and 2021.
This is mainly because Tesla CEO Musk would post memes about it on Twitter and, in turn, pump its price. It’s now the 11th biggest digital asset, with a market cap of $7.5 billion. At one point, that figure was as high as $88 billion—bigger than the market cap of many companies on the S&P 500.
Cryptocurrencies have declined sharply in recent weeks. Dogecoin’s fall has been precipitous over the past 13 months. Dogecoin was trading near an all-time high of $0.72 last May. It is now down to about $0.06.
The rise in the value of Dogecoing was aided by Musk’s tweets and a decision by his company SpaceX to accept payment in Dogecoin from Geometric Energy Corp. to launch a payload to the moon. Decrypt reports the hosting gig had the opposite effect.
Prior to Musk hosting the Saturday Night Live TV show last year, investors known as the Dogecoin Army were hoping the billionaire’s appearance would send the value “over the moon,” that is to say, over $1.00. Decrypt reports the hosting gig had the opposite effect.
As of this writing, DOGE is currently valued at a little over $0.06, down almost 91% since the eve of Musk’s SNL appearance on May 8, 2021. That night, Musk performed a series of monologues and skits that referenced Dogecoin, often mockingly.
During the show’s signature “Weekend Update” sketch, Musk conceded when pressed by cast members that Dogecoin was a “hustle.”
The coin began to plummet in value in real time as the show aired, shedding over 20% of its value in a single hour. So many people tried to offload the cryptocurrency during the SNL broadcast that trading app Robinhood was briefly overwhelmed by the volume of Dogecoin transactions.
Musk has announced that SpaceX would accept Dogecoin for merchandise and has proposed that Twitter take payments in the cryptocurrency if his plan to purchase the micro-blogging site for $44 billion is finalized.