Seven new investor claimants have joined the $258 billion extortion case that accused Tesla CEO Elon Musk of running a pyramid scheme to back the popular cryptocurrency Dogecoin, further expanding the case. The case was also expanded when six new defendants, including Musk’s tunnel construction company Boring Co, joined the same.
An amended complaint reportedly filed in Manhattan federal court Tuesday night has said that Elon Musk, his electric-car making company Tesla Inc, is collaborating on space tourism with SpaceX along with Boring and others to deliberately price Dogecoin. soar by more than 36,000 per cent over two years and then let it crash.
Tesla, SpaceX and Boring did not immediately respond to requests for comment on Wednesday. Tesla disbanded its media relations department in 2020, Reuters reported.
The original lawsuit was filed in June.
Shortly thereafter, Musk, the world’s richest person, tweeted that he would “continue to support Dogecoin,” and in an interview, “people who work in the SpaceX or Tesla factory” said he was asking for that support, according to the amended complaint.
Other new defendants include the Dogecoin Foundation, which calls itself a non-profit organization that provides the governance and support of Dogecoin. He was not immediately available for comment.
The $258 billion in damages is three times the estimated decline in Dogecoin’s market value since May 2021.
That was around the time Musk played a fictional financial expert on a “Weekend Update” segment of NBC’s “Saturday Night Live” called Dogecoin “a hustle.”
In the complaint filed in June,
Prosecutor Keith Johnson accused Musk, electric car company Tesla Inc and space tourism company SpaceX of extortion for touting Dogecoin and driving the price up, only to drive the price down, according to reports.
Keith Johnson, who said he lost his money after investing in Dogecoin, referred to himself as a “U.S. citizen who was scammed” by what he called a “Dogecoin Crypto Pyramid Scheme”.
“Defendants knew since 2019 that Dogecoin had no value, but promoted Dogecoin to profit from its trading,” the indictment said. “Musk used his pedestal as the world’s richest man to operate and manipulate the Dogecoin pyramid scheme for profit, fame and entertainment,” it added.
Dogecoin traded at about 6 cents on Wednesday, up from about 74 cents in May 2021, according to Reuters. At the time of writing this article on Friday, Dogecoin prices remained at $0.06332, according to data from CoinMarketCap.
The case is Johnson et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.
(With Reuters entries)
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