Elon Musk sued for $258bn (£209bn) over allegations that he ran a pyramid scheme to promote a cryptocurrency called Dogecoin.
The digital asset was launched as a joke in 2013 and was designed to make fun of Bitcoin.
But the cryptocurrency, also known as DOGE, made headlines after surging sharply last year.
In just over four months, Dogecoin rose from $0.004 to $0.73, a gain of over 18,000%.
Musk regularly tweeted about DOGE during this period, and on the day the currency began to drop, he described it as a “hustle” on the American comedy show Saturday Night Live.
Dogecoin has fallen dramatically over the past year and at the time of writing is down 92% from the all-time high seen last May.
The richest man in the world, along with Tesla and SpaceX, the companies of which he is CEO, are accused of “promoting Dogecoin to profit from its trade.”
A complaint filed in a New York court adds: “Musk used his pedestal as the world’s richest man to operate and manipulate the Dogecoin pyramid scheme for profit, exposure and fun.”
Musk is being sued by an American man named Keith Johnson, who alleges he was “swindled out of money” as a result of the businessman’s endorsements.
Johnson’s lawyers claim that cryptocurrency “has no value,” and court documents include quotes from billionaires Bill Gates and Warren Buffett, who have questioned the value of such digital assets.
The plaintiff wants to represent those who have lost money through Dogecoin since 2019.
Beyond his demands for $258 billion in damages, he also wants Musk, Tesla, and SpaceX banned from promoting DOGE.
Earlier this year, Tesla began accepting Dogecoin as a payment method for merchandise, but not for its electric cars.
Elon Musk, who is currently in the process of taking over Twitter, has yet to comment on the lawsuit.
