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Elon Musk, involved in scandals: he was sued for alleged pyramid scam with the Dogecoin cryptocurrency

The richest man in the world, Elon Musk, was involved in two strong controversies this week. On the one hand, a group of SpaceX employees who circulated an open letter criticizing him he was fired from the company. And, on the other, he was in the middle of an accusation of pyramid fraud for the Dogecoin cryptocurrency.

From a New York Times article, it emerged that the letter criticized Musk’s public behavior and said it was a distraction for SpaceX employees and that it did not lead to a positive image of the company among the public.

“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter read in part, the New York Times reports. “As our most prominent CEO and spokesperson, Elon is seen as the face of SpaceX: cEvery tweet Elon sends is a de facto public statement from the company.”.

Musk has long been a controversial figure, with actions such as smoking marijuana on the Joe Rogan show or being sued by the Securities and Exchange Commission (SEC) for tweets that affected the share prices of his companies.

But in recent months, public opinion of him seems to have shifted from lovable rogue to something more worrisome. He has been accused by a flight attendant of sexual harassment for which SpaceX paid a settlement of $250,000, despite Musk denying it, and a Tesla investor suing him for creating a “toxic” workplace that includes racial profiling and harassment.

With Musk’s offer to buy Twitter, his tweets have drawn even more attention, responding to tweets critical of Twitter employees and sparking a wave of online attacks against them.

In the open letter from SpaceX employees, as described by the Times, the employees say that the company should condemn this “harmful behavior by Twitter” and that “SpaceX must quickly and explicitly separate itself from Elon’s personal brand.”

The letter was first circulated on Wednesday of this week, and the Times reported that several employees who organized and distributed the letter were fired Thursday afternoon. Since then it has emerged that at least five employees have been laid off in connection with the letter, as reported by Reuters.

Sued by Dogecoin

The meme cryptocurrency. Photo Bloomberg

An investor in dogecoin, a cryptocurrency originally created as a joke but whose value rose and fell as promoted by Elon Musk, filed a lawsuit on Thursday for $258 billion against the billionaire and his companies Tesla and SpaceX.

Keith Johnson, who says he lost money after investing in dogecoin, described himself as a “US citizen who got scammed” by what he called a “Dogecoin crypto pyramid scheme.”

Johnson requests that his complaint, filed in a New York court, be classified as a class action lawsuit on behalf of those who have suffered losses by investing in dogecoin since 2019.

Since Musk began promoting the virtual currency, investors have lost about $86 billion, Johnson estimates. His wish is that Musk reimburse investors this sum, in addition to paying double in damages: an additional 172,000 million.

The creators of dogecoin, invented in 2013, say it was intended as an ironic response to two big internet phenomena: cryptocurrencies like bitcoin and the image of a meme of a Shiba Inu dog.

The price of dogecoin was traded in tenths of a cent for most of its existence. But its value took a jump in early 2021, rising to $0.73 in May of that year, in the midst of a shopping spree around the GameStop saga and after humorous messages about it from Musk. On Thursday, however, it was worth less than six cents.

Johnson said he believes Musk increased “the price, market capitalization, and trading volume of Dogecoin” through his promotion. To exemplify he included tweets from Musk, the world’s richest man who has more than 98 million followers on Twitter, including one promising that SpaceX “I would put a Dogecoin on the very moon.”

Johnson named Tesla, an electric car maker owned by Musk, in the lawsuit as accepting dogecoin as payment for certain derivative products. SpaceX was also included for having named one of its satellites doge.

Johnson linked cryptocurrency to a pyramid scheme, as it has no intrinsic value and is not a product. Also, it is not backed by a tangible asset and the number of “coins” is unlimited.

The demands of investors who feel cheated by the promises of virtual currency are increasing in the United States.

With information from AFP

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