Elon Musk $363 billion Dogecoin lawsuit expands

NEW YORK — The US$258 billion (S$363 billion) racketeering lawsuit accusing Elon Musk of running a pyramid scheme to support the cryptocurrency Dogecoin has expanded, adding seven new investor plaintiffs and six new defendants including his tunnel construction business Boring Co.

According to an amended complaint filed on Tuesday night (Aug 6) in Manhattan federal court, Musk, his electric car company Tesla Inc, his space tourism company SpaceX, Boring and others intentionally drove up the price of Dogecoin more than 36,000 per cent over two years and then let it crash.

By doing so, the defendants "profited tens of billions of dollars" at other Dogecoin investors' expense, while knowing all along that the currency lacked intrinsic value and that its value "depended solely on marketing," the complaint said.

Tesla, SpaceX and Boring did not immediately respond on Wednesday to requests for comment. Tesla disbanded its media relations department in 2020.

The original lawsuit was filed in June.

Shortly afterward, Musk, the world's richest person, tweeted that he would "keep supporting Dogecoin," and in an interview said "people that work around the factory at SpaceX or Tesla" asked him for that support, the amended complaint said.

Other new defendants include the Dogecoin Foundation, which calls itself a nonprofit providing governance and support for Dogecoin. It could not immediately be reached for comment.

The US$258 billion in damages is triple the estimated decline in Dogecoin's market value since May 2021.

That was around the time Musk, playing a fictitious financial expert on a "Weekend Update" segment of NBC's "Saturday Night Live," called Dogecoin "a hustle."

Dogecoin traded at about US$0.06 on Wednesday, down from around US$0.74 in May 2021.

The case is Johnson et al v. Musk et al, US District Court, Southern District of New York, No. 22-05037.