MittGroup CEO Grant Mitterlehner discusses cryptos’ amid Elon Musk Twitter news and market uncertainty.
The $258 billion racketeering lawsuit against Elon Musk has expanded, adding seven new investor plaintiffs and six new defendants.
Musk is accused of running a pyramid scheme to support the cryptocurrency Dogecoin.
Named in the amended complaint filed on Tuesday night in Manhattan federal court is Musk, his electric car company Tesla Inc, his space tourism company SpaceX, his tunnel construction business Boring Co. and others.
The suit claims they intentionally drove up the value of Dogecoin.
ELON MUSK SAYS TESLA IS ACCEPTING DOGECOIN FOR SOME MERCHANDISE
Elon Musk and a physical Dogecoin coin on white computer keyboard. (Getty Images / iStock / Getty Images)
Over a two-year period, Dogecoin gained more than 36,000% and then crashed.
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.
In this photo illustration, visual representations are shown of digital cryptocurrencies Dogecoin and Bitcoin. (Yuriko Nakao/Getty Images / Getty Images)
The original lawsuit was filed in June.
Shortly afterward, Musk, 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.
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Now joining as a new defendant includes the Dogecoin Foundation, which calls itself a nonprofit providing governance and support for Dogecoin.
The $258 billion in damages is triple the estimated decline in Dogecoin’s market value since May 2021.
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Dogecoin traded at about 6 cents on Wednesday, down from around 74 cents in May 2021.
Reuters contributed to this report.
