Elon Musk is facing a class action lawsuit claiming $258 billion from him and his companies Tesla, SpaceX and The Boring Company. He is accused of having created a Ponzi scheme which caused the investors to lose a lot of money.
Last June, a cryptocurrency investor filed a complaint against Elon Musk and companies Tesla and SpaceX. He estimates that he suffered $ 86 billion in losses after the sharp drop in value of Dogecoin, and claims this sum from each of the three entities, accused of having promoted the currency. For three months, the file has thickened and new actors are involved in the case.
Reuters reports that seven investors have joined the ranks of plaintiffs. Additionally, prosecution attorneys have identified six new defendants, including The Boring Company, a company founded by Elon Musk. The entrepreneur and the companies he runs allegedly intentionally drove up the price of Dogecoin by more than 36,000% over a two-year period to attract investors, before letting it crash, the plaintiffs believe.
Dogecoin crash: what responsibility for Elon Musk?
The complaint states that the defendants “have made tens of billions of dollars in profits” at the expense of other Dogecoin investors. According to the plaintiffs, Elon Musk, Tesla, SpaceX and The Boring Company knew that the good health of Dogecoin “depended solely on marketing” and that cryptocurrency lacked intrinsic value. Among the new players placed on the dock, we can also mention the Dogecoin Foundation, a non-profit organization that deals with the management of the network.
DOGE is trading at around $0.064 currently, down from $0.74 at its all-time high. Its value was therefore divided by more than 10 over the period. Elon Musk, however, assured that he will continue to buy Dogecoin despite the crypto crash. Last July, Tesla announced on the other hand that it had sold 75% of its Bitcoin holdings. Elon Musk tried to reassure by explaining that the automaker needed cash.
I will keep supporting Dogecoin
— Elon Musk (@elonmusk) June 19, 2022
Source: Reuters