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the tycoon Elon Musk faces a multimillion-dollar lawsuit for pyramid fraud, being accused of endorsing and manipulating the price of the cryptocurrency Dogecoin, whose value has fallen precipitously in recent years. What is the case about? What has been the participation of the richest man in the world?
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Keith Johnson, who lost money after investing in Dogecoindescribed himself as a “American citizen who was scammed” so he called a “Dogecoin crypto pyramid scheme”.
The plaintiff alleged that Musk and his companies deliberately promoted the virtual currency as a legitimate investment, even though it had originally been created as a meme. “The defendants knew since 2019 that Dogecoin it had no value and yet he promoted it to profit from his trade”says the complaint.
“Musk used his pedestal as the world’s richest man to operate and manipulate the pyramid scheme in Dogecoin for profit, exposure and fun”, the investor says filed a lawsuit in the Manhattan courts for US$258 billion against the billionaire and his companies Tesla and SpaceX.
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WHAT HAPPENED TO THE DOGECOIN?
Dogecoin was originally designed in 2013 as a joke. Its creators thought that the world of Bitcoin and cryptocurrencies was too serious, so they created an asset based on a dog meme.
No one paid much attention to it, but then influential Elon Musk started posting memes of it on social media in 2020. After that, it developed a cult following and its price skyrocketed.
Thus, the price of Dogecoin was traded in tenths of a cent for most of its existence, but in early 2021 it rose, reaching US$0.73 in May.
In mid-June 2022, however, it was worth less than six cents. Therefore, investor Keith Johnson believes that Musk increased “the price, market capitalization and trading volume of Dogecoin” through your promotion.
To support his accusation, he attached tweets from Musk, who has more than 98 million followers on Twitter. One of the messages promised that SpaceX “I would put a Dogecoin on the very moon.”
Just like Johnson, there are other investors who file lawsuits because they feel cheated by the promises of virtual currency in the United States.
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WHAT DOES MUSK SAY ABOUT DOGECOIN?
Elon Musk, amid the lawsuits and the collapse of Dogecoin, on June 21 announced his support for “memecoin”, which has caused it to shoot up by up to 13%, moving the cryptocurrency market.
The price of Dogecoin, which trades as DOGE, stood at US$0.06751. It was once again the 10th largest cryptocurrency with a market cap of $8.9 billion. Last week, he was in 11th position.
In his Twitter account, the tycoon indicated that “he will continue to support the Dogecoin”, although its price is still a long way from its peak of US$0.73.
Elon Musk’s first tweet about dogecoin was in April 2019, when he shared a dog meme with the caption “the dogecoin rulz.”