Many in the crypto community are skeptical about the class-action suit. The lawsuit against Elon Musk and his companies SpaceX, Tesla Inc, and SpaceX for $258 billion each for “being engaged in a crypto pyramid scheme involving Dogecoin ( DOGE)” is staggering.
The damages sought exceed 34 times Dogecoin’s current market capital of $7.5 billion, and almost three times its all time high (ATH) market capital of $88.68 trillion in mid-2021.
The class-action lawsuit was filed in New York District Court Thursday by Evan Spencer Law’s attorney. It alleges that Musk “used the position of World’s Richest man for the operation and manipulation of the Dogecoin Pyramid Scheme to profit, exposure and amusement.”
Plaintiff Keith Johnson, a United States citizen claims that Musk, and his corporations were “unjustly rich” by $86billion as a result wire fraud, gambling enterprise and deceptive practices.
Johnson claims that he and other class-action participants have lost $86 billion between May 2021 & June 2022. He is requesting that this figure be used in monetary damages, along with $172 billion in fees and damages.
“Defendant Musk is self-declared the ‘Dogefather’, ‘former CEO’ of Dogecoin,” partner, developer and spokesperson. He also promoted Dogecoin by assembling the ‘Doge Army’, which included his corporations as well as various billionaires, influencers and celebrities in order to increase the price, trading volume and market cap of Dogecoin.
Musk announced in January that Telsa, his electric vehicle company, would accept DOGE for payment for its merchandise. Musk announced in May that Dogecoin payments will also be accepted by SpaceX , his space exploration firm.
In addition to requesting an order declaring Dogecoin trading as gambling in New York and federal law, the lawsuit also claims that Musk and his companies have broken federal and state gambling laws.
“Since Plaintiff, the class were not informed that trading Dogecoin was nothing but a gambling enterprise,” Plaintiff and The Class demand the return all bets placed trading Dogecoin.
It will also order Musk and his companies, as well as any other unlicensed professionals involved in advertising, marketing and promoting Dogecoin in future.
Reactions from the community
The lawsuit was ridiculed by the crypto community.
Shibetoshi Nakamoto, pseudonymous creator of Dogecoin, tweeted the support evidence. He called the lawsuit “stupid and fuck” on Thursday but admitted that crypto trading is not much different than gambling.
Rahul Sood (CEO and co-founder at Irreverent Labs), which develops blockchain games, called it a “stupid lawsuit”.
“It’s amazing that someone in the US could start such a stupid class action lawsuit. These men knew exactly what they were getting themselves into. Ridiculous.”
Ron Coleman, a commercial litigator, is a partner at Dhillon Law Group and has 196,000 Twitter followers. replied a tweet about the news. He noted that “anyone can speak in a case.”