Is Dogecoin a pyramid scheme? Elon Musk sued for 258 billion dollars

The eccentric billionaire Elon Musk has been indicted for 258 billion dollars for allegedly manipulating the price of Dogecoin for his own personal gain. The CEO of SpaceX and Tesla is suspected of having abused his position to turn Dogecoin into a pyramid scheme.

Dogecoin price manipulation

According to Reuters news agency, Keith Johnson has filed a complaint with the federal court in Manhattan. He accuses Musk of extortion for touting DOGE and helping the price rise, only to have it fall.

The indictment alleges that Elon Musk “used his pedestal as the world’s richest man to operate and manipulate the Dogecoin pyramid scheme for profit, fame, and entertainment.” It further read:

“Defendants knew since 2019 that Dogecoin had no value, but promoted Dogecoin to profit from its trading.”

Tesla, SpaceX and Starlink may no longer accept doge

Several well-known personalities are quoted, including Warren Buffett and Bill Gates to bolster the argument of the indictment. They question the value of cryptocurrency. Initially, 86 billion dollars in damages were demanded, but this amount could be tripled. This amount was chosen because of the decline in value of Dogecoin since May 2021.

In addition, the plaintiff wants to enforce a ban on Musk and his company Tesla and SpaceX from promoting Dogecoin.

The plaintiff goes further than just attacking Musk. He also wants a judge to declare trading Dogecoin as gambling under federal and New York law. The lawsuit noted that the price of DOGE began plummeting after Elon Musk appeared on the TV show Saturday Night Live and said Dogecoin “is a hustle.”

Cryptocurrency is gambling

Billy Markus, one of the creators of Dogecoin makes a valid point by stating that Dogecoin is not much different from any other cryptocurrency. He, therefore, rightly wonders if the prosecutor wants to dismiss all cryptocurrencies as gambling.

Doge is better than bitcoin, says Musk

In the past, Elon Musk had suggested that his projects SpaceX and Starlink will soon accept doge as payment for services and products. It cannot be denied that Musk is a fanboy of dogecoin, and he even thinks that this crypto is better for transactions than bitcoin.

Musk said that bitcoin’s transaction volume is low, while its cost per transaction is high, making it more suitable as a store of value. This means that investors prefer to hold bitcoin for saving rather than selling or using it for transactions. It seems that the billionaire with all his knowledge and wealth, is not familiar with the lightning network. This makes it possible to carry out countless transactions per second with bitcoin at a minimal cost.

Tesla merchandise for Doge

Musk’s electric car manufacturer, Tesla, has also recently started accepting DOGE payments on its website. It even allows the purchase of specific products such as its ‘cyberwhistle,’ ‘Giga Texas,’ belt buckle ,’ and its ‘cyberquad’ quad bike for children. These items are all priced in DOGE, ranging from 12,020 coins for the four-wheeler to 300 DOGE for the whistle.

  • Florian Feidenfelder

    Florian Feidenfelder is a seasoned cryptocurrency trader and technical analyst with over 10 years of hands-on experience analyzing and investing in digital asset markets. After obtaining his bachelor's degree in Finance from the London School of Economics, he worked for major investment banks like JP Morgan, helping build trading systems and risk models for blockchain assets.

    Florian later founded Crypto Insights, a leading research firm providing actionable intelligence on crypto investments to hedge funds and family offices worldwide. He is the author of the bestseller "Mastering Bitcoin Trading" and has been featured in prominent publications like the Wall Street Journal, Bloomberg, and Barron's for his insights on blockchain technologies.

    With extensive knowledge spanning the early days of Bitcoin to today's explosive DeFi landscape, Florian lends his real-world expertise to guide both new entrants and seasoned professionals in capitalizing on the wealth-creating potential of crypto trading while effectively managing its inherent volatility risks.