After suffering losses of hundreds of billions of dollars during the sell-off of cryptocurrencies that has taken place over the past several weeks, many individuals who were once crypto millionaires are now looking for anything else to invest their money in.
In the United States District Court for the District of Manhattan on Thursday, an investor from the United States in the cryptocurrency Dogecoin filed a class action complaint against Elon Musk, Tesla, and SpaceX. The defendants are accused of engaging in racketeering activities to unlawfully influence the price of a cryptocurrency. This is said to have occurred to profit from the manipulation. When Elon Musk tweets about a cryptocurrency that has a theme relating to dogs, the price of the coin almost always goes up as a direct result of these tweets because of the increased demand. This is because Elon Musk’s tweets create more interest in cryptocurrency.
The plaintiffs in this action claim that Musk is accountable for damages among those who have lost money as a consequence of the recent collapse in the value of the cryptocurrency, which has ranged from a high of about $0.74 to a low of just over $0.05 over the last few days. This tweet, in addition to Musk’s reference to himself as the “Dogefather,” appears to be used as evidence in this case that Musk has been controlling the cryptocurrency, and that he is responsible for the losses that investors have sustained as a result of his actions. Because Musk has authority over bitcoin, the lawsuit seems to be making the argument that he should be held liable for any investment losses. This is one of the arguments that the complaint seems to be making.
There have been reports that the value of dogecoin has decreased by an amount that is comparable to 86 billion dollars in the time that has passed since Elon Musk’s first tweets on the cryptocurrency were made public. The lawsuit asks that the existing amount of damages be adjusted to a number that is three times higher, namely $86 billion.
The plaintiff, in this case, Keith Johnson, asserts that the defendants have made “false and misleading assurances that Dogecoin is a lawful investment when in reality it has no value at all.” This is the allegation that he is making in this lawsuit. According to the allegations made in the complaint, “the plaintiff and the class have lost almost $86 billion in this Crypto Pyramid Scheme since the defendant Musk and his companies SpaceX and Tesla, Inc. began purchasing, producing, promoting, supporting, and operating Dogecoin in 2019.” This loss was incurred “since the defendant Musk and his companies SpaceX and Tesla, Inc.” The case continues by stating, “The class as a whole has also lost close to 86 billion dollars in this crypto pyramid scheme.”