Elon Musk Might Be Sued For Dogecoin Losses
This is not the first time that Elon Musk has been accused of manipulating the markets. Last year, he was sued for tweeting false and misleading statements about taking Tesla private. The Securities and Exchange Commission (SEC) said that his tweets had caused “significant market disruption.” This time, it’s Dogecoin investors who say they’ve been misled by Musk’s tweets.
Dogecoin is a cryptocurrency that was started as a joke in 2013. It became popular because of its low price and memes featuring a Shiba Inu dog. Musk has tweeted about Dogecoin several times this year, causing its price to increase. But on May 4, 2021, he tweeted that Tesla would no longer accept Bitcoin as payment because of environmental concerns. This caused the prices of Bitcoin and other cryptocurrencies to drop sharply.
Some Dogecoin investors are suing Musk, claiming that his tweet about Tesla was part of a scheme to get rid of his Bitcoin holdings while driving up the price of Dogecoin. They say they have lost money because of his “fraudulent” tweets. It’s not clear yet if there will be a class-action lawsuit or how much money the plaintiffs could get if they win.
In 2019, Keith Johnson invested in the Dogecoin cryptocurrency. He has now filed a class-action lawsuit against Elon Musk, alleging that Musk’s illegal behavior has manipulated the price of Dogecoin and cost Johnson and other investors billions of dollars.
The suit alleges that Musk promoted Dogecoin on social media using false and misleading information in order to artificially inflate the price of the coin. It also accuses Musk of using his companies, Tesla and SpaceX, to buy large amounts of Dogecoin, leading investors to believe that he was confident in the coin’s future success.
Keith Johnson, a U.S. investor in the Dogecoin cryptocurrency, has filed a class-action lawsuit against Elon Musk and two of the companies he heads, alleging illegal behavior to manipulate the memecoin’s price. The suit seeks total damages of US $258 billion, or triple the stated alleged losses.
The complaint alleges that since Musk and his corporations began purchasing, developing, promoting, supporting, and operating Dogecoin in 2019, investors have lost approximately $86 billion in what amounts to a crypto-pyramid scheme. Tesla, Inc., and SpaceX are the two Musk companies named in the suit.
The lawsuit is just one example of how investors are increasingly taking legal action against those they believe have misled them in the notoriously volatile world of cryptocurrencies. In another high-profile case earlier this year, Ripple Labs was hit with a class-action lawsuit over claims that its XRP token is an unregistered security. That suit is still pending.