Musk is constantly up and down, and his physique is still hot. On June 16, Dogecoin investor Keith Johnson filed a lawsuit against Musk, Tesla, and Space X, claiming $258 billion. “They peddled Dogecoin and pushed its price up, and then let it crash.” The investor filed a court indictment accusing Musk, Tesla and SpaceX of racketeering.
Dogecoin is a cryptocurrency. In 2013, software engineers Marcus and Palmer jointly launched Dogecoin based on the Shiba Inu model, then registered the domain name of Dogecoin.com, and designed a picture of a gold coin with Doge emoji as the Logo to satirize Bitcoin currency. Initially, Dogecoin was mainly used as a tipping currency for Reddit, an American social information forum, and later it gradually became a popular variety in the cryptocurrency circle.
Johnson called Dogecoin a pyramid scheme that has neither intrinsic value nor a product. Musk has repeatedly made Dogecoin-related remarks on social media, affecting the price trend. Most of the time, after Musk’s speech, the price of Dogecoin fluctuates, and the two show a relatively obvious linkage effect.
According to data from the market software Trdingview, in the whole of 2021, Dogecoin will increase by as much as 3533%. As of now, Dogecoin is trading at $0.0555 per piece, down more than 90% from its high price in May 2021.
“Musk has publicly stated that he can use Dogecoin to buy Tesla products, and this statement will affect the price of Dogecoin.” Despite the indictment, Musk went his own way. On June 19, Musk tweeted that he would continue to support Dogecoin, saying he was “buying.”
In addition, Musk faces other troubles. Recently, a number of SpaceX employees jointly called for the company to draw a line from Musk’s super-influencer image. According to media reports, SpaceX immediately fired multiple incident participants.
Father of Dogecoin
Musk calls himself the “Father of Dogecoin.”
On April Fool’s Day in 2019, Musk and Dogecoin intersected for the first time. At that time, the official account of Dogecoin launched a vote for the CEO of Dogecoin on social media. Musk was elected by an overwhelming margin. “Dogecoin is probably my favorite digital currency, it’s super cool,” Musk said.
Most of the time, when Musk makes comments about Dogecoin on social media, there will be a wonderful “price linkage effect”.
In January last year, Musk tweeted a picture of a fictitious Dogue magazine, and the price of Dogecoin soared, rising ninefold in one day. On February 4 of the same year, Musk tweeted several times, declaring that “you don’t need to be a millionaire to own it. Dogecoin is the people’s cryptocurrency.” On the same day, the price of Dogecoin rose by 60%, with a market value of 10 billion The U.S. dollar has become the eighth-largest cryptocurrency by market capitalization in the world. On April 16, Musk released the “dog barking at the moon”, and Dogecoin rose by more than 200% in a single day.
Musk’s remarks have also triggered a plunge in Dogecoin.
On May 8, 2021, Musk participated in a well-known entertainment variety show and called himself the godfather of Dogecoin. “He also predicted that Dogecoin is the future of money, an unstoppable financial tool that will take over the world.” However, Musk also stated that Dogecoin is a “scam”. Dogecoin plummeted in response, with the price dropping nearly 40% at one point.
Many industry insiders and institutions have successively voiced their warnings about the risks of Dogecoin.
On November 20, 2021, the Reserve Bank of Australia issued a speculative cryptocurrency warning, telling investors to be wary of the risks of virtual currencies such as Dogecoin. The relevant spokesperson said that the investment boom in cryptocurrencies such as Dogecoin and SHIB was triggered by the tweets of Internet celebrities and celebrities, and although the market value continued to grow, it did not have any useful functions.
At the end of April this year, Du Jun, co-founder of Huobi Group, reminded that Dogecoin has almost no breakthrough in technical concepts. The holders are highly concentrated. The top 10 holding addresses own 41.35% of all tokens in circulation. A few users can easily manipulate the price. Investors should enter the market with caution.
Investors Lost About $86 Billion?
Johnson accused Musk and others of manipulating the price of Dogecoin and allegedly extorting money.
“Defendants have known since 2019 that Dogecoin has no value, but they are still promoting Dogecoin and making a profit from it.” Johnson said in the indictment that Musk used his status as the world’s richest man to operate and manipulate Dogecoin” Pyramid scam” for profit. Musk remains the world’s richest man with a fortune of more than $213 billion, according to the Forbes Rich List.
Johnson estimates that investors have lost about $86 billion since Musk began promoting Dogecoin. He asked Musk to repay the money and triple the amount to $258 billion.
The Times reporter noticed that on Tesla’s US official website, some products in Tesla’s US online store still accept Dogecoin as a payment option.
Weng Guanxing pointed out that the market price of virtual currency fluctuates greatly, there is no limit system, and the risk is high. Investing in virtual currency should have sufficient financial technology knowledge, and investors should be responsible for investment behavior based on their true intentions. This is one of the most important principles of the common law system.
“Musk has publicly stated on social media that Tesla products can be purchased with Dogecoin. Considering Tesla’s market share, Musk’s attitude can greatly affect the price of Dogecoin.” Weng Guanxing said, such as Musk took the opportunity to sell his Dogecoin holdings, which may constitute market manipulation.
“Whether the investor can win the lawsuit depends on the evidence and what kind of request is made.” Weng Guanxing said that if it is just ordinary market fluctuations that cause investors to lose, even though Musk has bought a large amount of Dogecoin and has publicly promoted Dogecoin, the court is also very concerned. It is difficult to support such a high compensation claim.
“U.S. class actions are generally not initiated by victims, but initiated by lawyers. Lawyers take the initiative to contact victims and solicit authorization from victims through any possible public means to conduct class actions on their behalf.” Weng Guanxing said that in securities class actions, due to The amount involved is huge and often brings huge benefits to lawyers. So lawyers look for opportunities to file large-scale lawsuits in order to obtain high legal fees.
It is worth noting that Musk has been sued many times before for allegedly manipulating stock prices. In mid-April this year, Musk was sued by investors for allegedly manipulating Twitter’s stock price.