Elon Musk has been a fierce Dogecoin (DOGE) proponent for several years. The Tesla and SpaceX CEO has publicly stated his support for the cryptocurrency allegedly because of its features and capacity to be “fun”.

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This has led Dogecoin (DOGE) to benefit from a massive surge in popularity as retail investors piled in on the so-called memecoin. This led Dogecoin to experience a rally from below $0.10 to an all-time near $0.75 as part of a Musk-led movement to push it to $1.

Dogecoin bulls failed, and retail suffered massive losses. According to a report from the New York Post, Musk and his companies could face consequences for their alleged participation in promoting Dogecoin.

Keith Johnson, a failed DOGE investor, filed a lawsuit against the entrepreneurs and his companies. The plaintiff claims that Musk allegedly defrauded out of his money by running a “Dogecoin Crypto Pyramid Scheme”.

Johnson seeks to “represent a class of people who have lost money in trading Dogecoin” and investors with a similar case. According to the document filed with the New York court in Manhattan:

Defendants (Musk, Tesla, SpaceX) falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.

Johnson seeks a staggering $86 billion in damages, in addition to $172 billion for triple damages, and to prevent Mr. Musk from promoting Dogecoin. The memecoin is accepted as a form of payment to purchase SpaceX and Tesla merchandise.

According to the New York Post, the plaintiff claims the following:

Dogecoin is not a currency, stock, or security. It’s not backed by gold, other precious metal, or anything at all. You can’t eat it, grow it, or wear it. It doesn’t pay interest or dividend. It has no unique utility compared to other cryptocurrencies…It’s not secured by a government or private entity. It’s simply a fraud whereby ‘greater fools’ are deceived into buying the coin at a higher price.

Dogecoin Enters The Cryptonight

8 months ago, Musk was able to apparently control the price of Dogecoin and other cryptocurrencies. However, things changed after the memecoin peaked in 2021 when the entrepreneur hosted the popular U.S. comedy show “Saturday Night Live”.

After that, DOGE’s price has been trending to the downside. The memecoin has seen more pain over the past few days as larger cryptocurrencies break below their critical support zones. In response to the downside price action across the crypto markets and the increasing volatility, Musk simply wrote:

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At the time of writing, DOGE’s price trades at $0.05 with a 30% loss in the last 7 days and an 82% loss over the past year.