Accusing Elon Musk of having manipulated the price of Dogecoin, plaintiffs claim 258 billion dollars from him.
The lawsuit between billionaire Elon Musk and several investors accusing him of having deceived their trust gained further momentum last Wednesday. The Tesla founder and several of his companies are being sued for deliberately overestimating the value of Dogecoin before letting it crash. One of the investors is claiming $258 billion.
What is Dogecoin?
In 2013, the Dogecoin was, according to its inventors, born of a simple joke. It is indeed a fusion between two memes of the time: Doge, a shiba known on the Internet, and bitcoin, which is then still far from its current valuation. The cryptocurrency, whose code is available in open source, is created to be easily accessible to the greatest number, but remains relatively behind compared to other behemoths in the sector.
Until, in early 2021, Elon Musk tweeted his love of this crypto. A statement followed later by the announcement that it would be possible to buy certain Tesla products in Dogecoin. But in May 2021, the billionaire participates in the cult show Saturday Night Live. In one of the sketches, he plays a financial analyst who describes Dogecoin as a “ scam “. Its course collapses immediately. Today, it is worth less than 10% of the value it had at the time, its historical peak.
What is Elon Musk accused of?
On the dock is the boss of Tesla, therefore, but he is accompanied by several of his companies: the brand of electric cars, as well as The Boring Company or Space X, his space tourism company. According to one complaint, the value of Dogecoin was deliberately inflated, growing 36,000% in one year. A value which, according to the plaintiffs, was however only based on intense marketing campaigns, and which plunged when the South African entrepreneur lost interest in this cryptocurrency. He is now accused of having won tens of billions of dollars in what some do not hesitate to call a pyramid scheme.
The prosecution is now trying to prove that Musk knew as early as 2019 that Dogecoin had no intrinsic value, but continued to promote it for his personal benefit. His status as the richest man in the world as well as his Twitter account (already singled out by the American financial market authority for manipulation of the Tesla share price) are indeed formidable sounding boards for indulging in such operation.
If the prosecution wishes to obtain reparations for those injured, it does not stop there. The plaintiffs also want investing in Dogecoin to be legally considered gambling, and that Musk’s companies be permanently banned from promoting it.
Sources: Reuters, West France
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