Musk reaffirms support for Dogecoin amid $258bn lawsuit

Elon Musk, who has long been a vocal supporter of cryptocurrency token Dogecoin, reaffirmed support for it over the past two days – even as a class action lawsuit was filed against him at a federal court in Manhattan, USA on Thursday, June 16. Taking to Twitter, Musk said over the weekend that he “will keep supporting Dogecoin”, and that he continues to buy the coin even amid a market downturn.

Musk’s tweets on Dogecoin saw the token’s price surge by over 20% even in a bear crypto market, which has seen the likes of Bitcoin and Ether crash to new lows and instilling uncertainty among new and first-time crypto investors. While the price has come down from its weekend high, it is still trading at a level higher than what it did over the past one week.

Prior to Musk’s tweets, Dogecoin was trading at around Rs 3.93 – which surged to Rs 4.83 over the weekend. At the time of publishing, Dogecoin is trading at Rs 4.6, according to Coinbase data.

However, the class action lawsuit alleges that Musk’s influential position has caused undue inflation of Dogecoin prices, and accuses him of operating an “illegal racketeering enterprise” to control Dogecoin prices.

Keith Johnson, who has filed the lawsuit against Musk for Dogecoin, said in his court filing that since Musk, through his companies SpaceX and Tesla, began “purchasing, developing, promoting, supporting and operating Dogecoin since 2019”, the class of complainants have lost “approximately $86 billion in this Crypto Pyramid Scheme”.

This is not the first time that voices have been raised against ‘memecoins’ such as Doge, which are cryptocurrency tokens that do not have a purpose backing up the blockchain network and project. In November last year, whistleblower Edward Snowden spoke up against investors flocking to fellow memecoin Shiba Inu, stating, “If you got talked into exchanging your hard-earned savings for some new dog money because a meme said you'd get rich, please carefully consider your odds of outsmarting a market that sold to you its stake in not even dog money, but a ‘clone’ of dog money.”

Musk, however, has affirmed amid all of this that he will support the Dogecoin network. In further tweets over the weekend, he said that alongside Dogecoin being an acceptable payment method for purchasing Tesla and SpaceX merchandise, he may expand its use case to “more down the road.” The executive has already hinted that he could soon start allowing users to purchase Starlink broadband subscriptions with Dogecoin.