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Musk sued over alleged Dogecoin pyramid scheme

STORY: No stranger to being sued, Elon Musk faces a new lawsuit, this one for $258 billion - not by an investor in Tesla, or even Twitter - but by an investor in the cryptocurrency Dogecoin.

In a complaint filed in Manhattan federal court, plaintiff Keith Johnson accused Musk, his electric car company and his space tourism company SpaceX of running a pyramid scheme, touting Dogecoin and driving up its price, only to then let the price tumble.

The complaint alleges that Musk was aware that Dogecoin had no value yet promoted it to profit from its trading, and that he "used his pedestal as World's Richest man to operate and manipulate the Dogecoin Pyramid Scheme for profit, exposure and amusement."

Tesla, SpaceX and a lawyer for Musk did not immediately respond to requests for comment.

A lawyer for Johnson did not immediately respond to a request for comment on what specific evidence his client has or expects to have that proves Dogecoin is worthless and that Musk ran a pyramid scheme.

Johnson is seeking $86 billion in damages, representing the decline in Dogecoin's market value since May 2021, and wants it tripled.

He also wants to block Musk and his companies from promoting Dogecoin, and for a judge to declare that trading Dogecoin is gambling under federal and New York law.

Over the last two years, Musk has tweeted often about Dogecoin, including an April 2021 post that said "SpaceX is going to put a literal Dogecoin on the literal moon."

The complaint said Dogecoin's selloff began around the time Musk hosted "Saturday Night Live" on May 8 of 2021 and, playing a fictitious financial expert on a "Weekend Update" segment, called Dogecoin "a hustle."

As of Thursday, Dogecoin traded at about 6 cents, down from its May 2021 peak of about 74 cents, which amounts to a more than 90% decline in value.