`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 1 of 26
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`
`KEITH JOHNSON,individually and on behalf
`ofall others similarly situated,
`
`- versus-
`
`Plaintiff,
`
`ELON MUSK, SPACE EXPLORATION
`TECHNOLOGIES CORP dba SPACEX,and
`TESLA,INC.,
`
`Defendants.
`
`
`
`Case No.: 1:22-cv-5037
`
`CLASS ACTION COMPLAINT
`
`JURY DEMANDED
`
`INTRODUCTION
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`Defendants Elon Musk, SpaceX and Tesla, Inc. are engaged in a Crypto Pyramid Scheme
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`(aka Ponzi scheme) by way of Dogecoin cryptocurrency. Dogecoinis not a currency, stock, or
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`security. It’s not backed by gold, other precious metal, or anything at all. You can’t eatit, grow
`
`it, or wear it. Dogecoin does not generate cash flow. It doesn’t pay interest or a dividend. It has
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`no uniqueutility compared to other cryptocurrencies. It is not part of a new internet or the
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`metaverse. It’s not based uponortied to anything of value. It’s not secured by a government or
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`private entity. The numberofcoins is unlimited. It’s simply a fraud whereby “greater fools” are
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`deceived into buying the coin at a higher price. Since Defendant Muskand his corporations
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`SpaceX andTesla, Inc. began purchasing, developing, promoting, supporting, and operating
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`Dogecoin in 2019, Plaintiff and the class have lost approximately $86 billion in this Crypto
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`Pyramid Scheme. Defendant Muskis the self-appointed “Dogefather,”“former CEO of
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`Dogecoin,” partner, developer, spokesperson, publicist, salesman, marketer, and promoter of
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`Dogecoin, who assembled the “Doge Army”including his corporations and variousbillionaires,
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`influencers, and celebrities to increase the price, market cap and trading volume of Dogecoin.
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`Plaintiff demands an accounting, monetary damages, punitive damages, and equitable relief.
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`
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 2 of 26
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`STATEMENT OF FACTS
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`1)
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`In 2013, Dogecoin cryptocurrency was launched by co-founders Billy Markus and
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`Jackson Palmerat a price of $0.0002 per coin (2/100of a penny).
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`2)
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`Markus openly admitted that he created Dogecoin in about two hoursas a joke and
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`that it relied 99.99% on the “greater fool theory.”
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`3)
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`On December 21, 2013, the Market Cap was only $3.71 million.
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`4)
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`Its price increased over 10-foldin its first fifteen days to $0.0023.
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`5)
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`Defendant Muskstarted talking to Dogecoin developers in 2019, providing advice
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`and sharing his vast Rolodex of contacts.
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`6)
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`Since that time Defendant Musk andpeople including his family, friends, employees
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`and followers began to purchase Dogecoin.
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`7)
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`Defendant Muskis one the world’s wealthiest individuals with estimated net worth in
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`excess of $250 billion with approximately 100 million Twitter followers who spread
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`his frequent tweets to billions of people around the world.
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`8)
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`Heis also the CEO of Defendants SpaceX and Tesla, Inc. who jointly promote
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`Dogecoin (SpaceX nameda satellite after Dogecoin and Tesla accepts Dogecoin for
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`merchandise).
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`9)
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`Overthe last three years, Defendant Musk,individually, and in his position as
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`President of SpaceX and Tesla, Inc., garnered the support of celebrities, influencers,
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`and billionaire investors along with thousands of Tik Tok, Twitter, Facebook, and
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`Instagram followers, owners, and supporters of Dogecoin to boastthe price, trading
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`volume, and market cap of Dogecoin.
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`10) These individuals and entities include butare not limited to billionaire entrepreneur
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`
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`Case 1:22-cv-05037 Document 1 Filed 06/16/22 Page 3 of 26
`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 3 of 26
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`Mark Cuban andthe Dallas Mavericks NBA basketball team, artist and entrepreneur
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`Snoop Dogg,artist Kevin Jonas, celebrity chef Guy Fieri, rapper Lil’ Yachty, actress
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`Vicky-Lee Valentino, adult star Angela White and artist Gene Simmons who has
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`dubbed himself the “God of Dogecoin,” just to name a few.
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`11) Defendant Muskhas been tweeting about Dogecoin sinceat least April 2, 2019, when
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`he shareda satirical article from The Onion about Bitcoin price volatility and added:
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`“Dogecoin value may vary.” Musk followed up with: “Dogecoin might be my fav
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`cryptocurrency.It’s pretty cool.”
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`12) Defendant Musk also posted, “Dogecoin rulz” on April 2, 2019, together with a dog
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`smoking a cigarette and the caption: “Doge? I haven’t heard that namein years.”
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`13) These tweets were prompted by a Dogecoin online survey on April 1, 2019, wherein
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`54.4% of 4.366 voters chose Defendant Musk (morethan all other candidates
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`combined) as the “CEO”of Dogecoin: “We have decided that Dogecoin does need a
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`CEO. Someone whocan lead usinto the future while maintain the core values of
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`what weare.”
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`14) Clearly, Defendant Muskaccepted this appointment as CEO of Dogecoin by virtue of
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`his conduct and that of Tesla and SpaceX since April 1, 2019.
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`15) While Dogecoin had a market cap of $250 million on April 1, 2019, trading at
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`$0.0020 (roughly the sameprice as six years prior), after Defendant Musk’s tweets,
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`the market cap rose to $480 million, and the price doubled to $0.0040 in three days.
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`16) Defendant Muskis and has been fully aware that his tweets regarding Dogecoin had
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`direct effects on the Dogecoin price, market cap, and trading volume.
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`17) On July 17, 2020, Defendant Musk tweeted that ‘the Dogecoin standard’ would
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`
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`inevitably take over the global financial system.
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`18) Defendant Musk’s tweet on July 17, 2020, was enough to send Dogecoin’s price up
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`from $0.0029 to $0.0036 an increase of nearly 25% in only two days, increasing the
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`market cap from $363 million to $452 million.
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`19) On November 11, 2020, SpaceX vice-president of commercial sales Tom Ochinero
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`announcedthat, "This mission will demonstrate the application of cryptocurrency
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`beyond Earth orbit and set the foundation for interplanetary commerce. We’re excited
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`to launch DOGE-1 to the Moon!”
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`20) On December 14, 2020, Defendant Musk tweeted that Tesla, Inc. would accept
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`Dogecoin as payment for some merchandise and the price rose more from $0.0032 to
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`$0.0040, a rise of 25% by December 17, 2020.
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`21) On December20, 2020, Defendant Musk tweeted, “One word: DOGE”. Only a few
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`hours later, the token saw its valuation spike from $0.0039 to $0.0054, an increase of
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`40%.
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`22) On December25, 2020, Defendant Musk tweeted the Dogecoin logo, and the price
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`increased again.
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`23) On January 13, 2021, Defendant Musk Tweeted, “Tesla merch buyable with
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`Dogecoin,” which caused the market cap of Dogecoin to increase from $1 billion to
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`$1.3 billion in less than 48 hours, an increase of 30%, and causedtheprice to rise
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`from $0.0068 to $0.0098.
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`24) By February 2, 2021, Dogecoin wastrading at $0.03.
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`25) On February 4, 2021, Defendant Musk posted four Tweets regarding Dogecoin,
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`including,“No highs, no lows, only Doge” and “Dogecoin is the people’s crypto,”
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`causing the market cap tohit an all-time high of $7.4 billion.
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`26) On February 5, 2021, Defendant Musk posted a survey on Twitter regarding, “The
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`future currency of Earth” where 71% voted for “Dogecoin to the Moooonn [sic]” over
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`“All other crypto combined.”
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`27) On February 7, 2021, Defendant Muskposted a full-blown cryptocurrency
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`instructional video on Twitter (“D is for Dogecoin! Instructional video.”’) and tweeted,
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`“Wholet the Doge out” and by February 8, 2021, Dogecoin wastrading at $0.084, an
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`increase of over 250% in less than one week.
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`28) On February 10, 2021, Defendant Musk tweeted that he purchased Dogecoin for his
`
`son together with a picture of his infant son.
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`29) On February 11, 2021, Defendant Musk tweeteda satirical post of Dogecoin and Lord
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`ofthe Rings where he wrote, “Frodo was the underdoge...” and “ONE COIN TO
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`RULE THEM ALL”and the market cap soared to nearly $11 billion.
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`30) On February 13, 2021, Dogecoin wastrading at $0.07 before Defendant Musk
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`tweeted the following on February 14, 2021, in a stunning reversal of his position on
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`Dogecoin, “If major Dogecoin holders sell most of their coins, it will get my full
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`support. Too much concentration is the only real issue imo.”
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`31) Then, on February 15, 2021, Defendant Musktweeted,“I will literally pay actual $ if
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`they just void their accounts.”
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`32) By February 17, 2021, the price of Dogecoin dropped to $0.044, approximately a
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`35% drop in three days due to Defendant Musk’s tweets encouraging Dogecoin
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`holdersto sell, reducing the market cap from $11 billion to $6.2 billion, a loss of
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`nearly $5 billion in less than one week.
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`33) On February 20, 2021, Defendant Muskposted a link to another YouTube
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`cryptocurrency video and on February 21, 2021, Musk tweeted, “Dojo 4 Doge.”
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`34) These two tweets caused the Dogecoin price to jump from less than $0.052 to $0.06
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`or 16%.
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`35) On February 24, 2021, Defendant Musk tweeted on behalf of himself and SpaceX,
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`“Literally ... On the actual moon” with an image of a dog hoisting a Dogecoin flag on
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`the moon,causing the price to jump from $0.043 on February 23, 2021, to $0.06 the
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`next day, a jump of 40% in less than two days.
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`36) The trading volume from February 20 - 24, 2021, was approximately $3 billion per
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`day.
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`37) On or about February 25, 2021, it was reported that the SEC wasinvestigating
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`Defendant Muskfor his tweets about Dogecoin.
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`38) Musk responded to the rumoredheadlines in a tweet stating, “Good luck catching my
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`rocket. Doge will live forever. #dogefather.”
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`39) On March 1, 2021, Defendant Musk posted a meme showing a person in a
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`camouflage uniform on fire on his knees with bloodat his feet shielding a sleeping
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`person in bed (represented as “DOGECOIN”) from missiles, grenades, bullets, and
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`knives.
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`40) On March 5, 2021, Defendant Musk Tweetedthat, “Doge spelled backwardsis
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`Egod.”
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`41) On March 13, 2021, Defendant Musk Tweeted three times about Dogecoin, including,
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`“Whyare you so dogematic, they ask.”
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`42) After these March 2021 tweets, Dogecoin rose from $0.045 to $0.063 from February
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`
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 7 of 26
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`28 to March 13, an increase of 40% in two weeks.
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`43) On April 1, 2021, Defendant Musk Tweeted that SpaceX is going to put a literal
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`Dogecoin on the literal moon.
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`44) On April 14, 2021, Defendant Musk tweeted artwork of a dog and a moon captioned,
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`“Doge Barking at the Moon.”(in crypto parlance “moon”refers to a rapidly rising
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`price).
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`45) Asa result, the price of Dogecoin rose from $0.07 to $0.40 (over 500%) in less than
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`two days with daily trading volume averaging approximately $70 billion.
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`46) By April 17, 2021, the Dogecoin market cap had jumped from $8 billion to $55
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`billion in less than one week.
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`47) It was during the month ofApril 2021, that Plaintiff purchased Dogecoin at a price of
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`approximately $0.30 per coin as a result of Defendants’ conduct.
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`48) By April 22, 2021, Dogecoin droppedas low as $0.18, but on April 24, 2021, it was
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`announced that Defendant Musk would host the comedy show Saturday Night Live
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`on May 9, 2021, in New York City on NBC.
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`49) On April 28, 2021, Defendant Musk Tweeted, “The Dogefather SNL May8.”
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`50) On May6, 2021, the Dogecoin Market Cap hit $88.7 billion and the price of the coin
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`hit a peak of $0.73.
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`51) On May9, 2021, Musk tweeted, “SpaceX launching satellite Doge-1 to the moon
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`next year — Mission paid for in Doge — Ist crypto in space — 1st memein space
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`To the mooooonnn!!”
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`52) Defendant Musk appeared on Saturday Night Live on May 9, 2021.
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`53) During a sketch Defendant Musk appearedasa fictional financial expert called Lloyd
`
`
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 8 of 26
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`Ostertag where he again referred to himself as “the Dogefather.”
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`54) Defendant Musk stated among otherthingsthat, “It’s the future of currency,” before
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`agreeing Dogecoinis, “a hustle.”
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`55) Defendant Musk’s appearance on Saturday Night Live reflected negatively on
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`Dogecoin for multiple reasons, causing the trading volume to skyrocket and the price
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`to plummet.
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`56) The Dogecoin daily trading volume peakedat over $46 billion on May 9, 2021.
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`57) Within four days, the Dogecoin market cap dropped from $95 billion to $45 billion
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`(nearly 50%) and the price dropped from $0.73 to $0.38.
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`58) On May 13, 2021, Defendant Musk tweeted a picture of a Tesla interior with a sign
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`that read “DON’T PANIC”anda post that read, “As always.”
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`59) This was followed by a post that said, “Working with Doge devs to improve system
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`transaction efficiency, (P)otentially promising.”
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`60) Within one day the price of Dogecoin jumped 50%,soaring to $0.58 as a result of
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`Defendant Musk’s encouraging tweet.
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`61) Dogecoin prices immediately shot higher with a market cap of $72.5 billion, $8
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`billion higher or 15%.
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`62) On May 16, 2021, the market cap dropped to $63 billion and on May 20, 2021, the
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`market cap dropped to $46.6 billion, and the price dropped to $0.27.
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`63) On May20, 2021, at 10:56 am, Defendant Musk tweeted, “Yeah, I haven’t & won’t
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`sell Doge” and a meme with the statement, “How muchis that Doge in the window?”
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`As a result, the price jumped 60% to $0.43 on May 20, 2021.
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`64) On May 24, 2021, Defendant Musk tweeted, “If you’d like to help develop Doge,
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`
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 9 of 26
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`please submit ideas on GitHub & reddit.com...” and “Someone suggested changing
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`Dogecoin fees based on phases of the moon, whichis pretty awesome ha ha,” causing
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`the price to jump from $0.28 to $0.38 (35% increase in one day).
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`65) However, on May 25, 2021, Defendant Musk tweeted, “Please note Dogecoin has no
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`formal organization & no one reports to me, so myability to take action is limited.”
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`66) May 25, 2021, Dogecoin wastrading at $0.36 but dropped more than 50% to $0.17
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`after Defendants Musk’s derogatory tweet.
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`67) On July 1, 2021, Defendant Musktweeted, “Release the Doge!” and “Baby Doge,
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`doo, doo, doo, doo, doo, Baby Doge, doo, doo, doo, doo, doo, Baby Doge, doo, doo,
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`doo, doo, doo, Baby Doge” and on July 2, 2011, Defendant Musk tweeted a meme
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`with three young beautiful womensurrounding a smiling young man on a laptop with
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`the words “dogecoin Polytopia” above a graph depicting an increasing price, causing
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`the price to rise to $0.25.
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`68) On July 24, 2021, Defendant Musk tweeted a meme with Neo from The Matrix
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`stating: “What are youtrying to tell me, that I can makea lot of money with
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`Dogecoin?” The response by the Dogecoin dog with sunglasses is: “No, Neo. I’m
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`trying to tell you that Dogecoin is money.” As a result, the price increased from $0.19
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`to $0.23 (over 20%) in 24 hours.
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`69) On October 23, 2021, the price was $0.25 when Defendant Musk tweeted, “Lots of
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`people I talked to on the production lines at Tesla or building rockets at SpaceX own
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`Doge. They aren’t financial experts or Silicon Valley technologists. That’s why I
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`decided to support Doge—it felt like the people’s crypto.”
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`70) By October 28, 2021, the price increased to $0.33 as a result of Defendant Musk’s
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`
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`tweet, 33% in five days.
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`71) On October 31, 2021, Defendant Musk tweeted, “Tuition is in Dogecoin & u get a
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`discount if you have a dog”.
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`72) Defendant Musk announced on December 14, 2021, that Defendant Tesla will
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`accept Dogecoin payments for brand merchandise andthe price jumped 25%
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`from $0.16 to $0.20.
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`73) On January 25, 2022, Defendant Musk tweeted: “I will eat a happy meal ontv if
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`@McDonaldsaccepts Dogecoin.” While this offer was not accepted the
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`Dogecoin price increased from $0.14 to $0.15 in 24 hours (8% increase) as a
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`result of the Tweet.
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`74) On February 18, 2022, Defendant Musk tweeted, “And futuristic diner / drive-in
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`theater planned for Hollywood area! ... And, of course, you can pay in Doge”
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`causing the Dogecoin price to increase from $0.14 to $0.15 in 24 hours (8%
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`increase).
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`75) On March 11, 2022, the Dogecoin price dropped to $0.11 with a market cap of $15.28
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`billion.
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`76) On March 13, 2022, 9:11 pm Defendant Musk tweeted, “As a general principle, for
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`those looking for advice from this thread, it is generally better to own physical things
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`like a homeor stock in companies you think make good products, than dollars when
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`inflation is high. I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.”
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`7T) March 18, 2022, Market Cap was $16.39 billion and on March 25, 2022, Market Cap
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`was $17.82 billion.
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`78) Defendant Musk’s tweet caused a $2.5 billion Market Cap spike, approximately 15%
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`10
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`in 14 days.
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`79) On May 12, 2022, Defendant Musktweeted that, “it (Dogecoin) has the potential of
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`currency,” causing the price to increase from $0.074 to $0.093 in a day,
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`approximately 25%.
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`80) On May26, 2022, Defendant Musktweeted, “Dogecoin Trillionaire, the Movie,”
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`which had noeffect on the price, apparently the first time this has ever occurred.
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`81) Since Dogecoin peaked at $0.73 in May 2021, it has droppedto aslittle as $0.052,
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`down 92% from its all-time high.
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`82) Plaintiff sold his Dogecoin in June 2022 at a price of $0.08, losing approximately
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`70% of his investment.
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`83) Overthe last three years, Defendants have engagedin and profited from the
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`manipulation of the price of Dogecoin in this Crypto Pyramid Scheme,on behalf of
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`themselves individually, as well as family members, friends, employees and
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`followers.
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`84) Before Defendant Musk began promoting Dogecoin, the market cap had slowly
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`grown oversix years to $250 million on April 1, 2019, with a daily trading volume of
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`only $19 million.
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`85) Dogecoin jumped to a peak daily trading volume of $28 billion (1,500-fold increase
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`or 150,000%) and a market cap of $93 billion (360-fold increase or 36,000%) in May
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`2021, all in just two years because of Defendants’ conduct.
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`86) The Dogecoin price rose from $0.002 to $0.73 (350-fold increase or 35,000%).
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`87) However, as of June 13, 2022,the price of Dogecoin dropped as low as $0.052, a loss
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`of 92% and $86billion in market cap since May 2021.
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`11
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`88) Every statement and endorsement from Defendants on social media regarding
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`Dogecoin has knowingly caused millions of people to spend billions of dollars buying
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`into the Dogecoin Crypto Pyramid Scheme.
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`89) The ripple effect of Defendants’ conduct regarding Dogecoin caused the entire crypto
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`marketcap to increase to $3 trillion in the summerof 2021.
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`90) Since that time, nearly $2trillion has been lost in the crypto marketplace as the entire
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`crypto market cap is presently close to $1 trillion, crashing after Defendant Musktold
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`the world on Saturday Night Live that crypto was, “a hustle.”
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`DEFENDANTS’ PRIOR SEC VIOLATIONS
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`91) Defendant Muskhasa history of failing to comply with the Securities and Exchange
`
`Commission (SEC).
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`92) In 2018, Defendant Muskentered a consent decree with the SEC for misleading
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`investors when he tweeted that he had gathered enough fundingto take Tesla private.
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`93) Defendant Muskpaid a $40 million fine and agreed to step down as chairman and vet
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`his tweets with lawyers.
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`94) After paying this fine Defendant Musk insulted the SEC on October4, 2018, by
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`tweeting, “Just want to that the Shortseller Enrichment Commissionis doing
`
`incredible work. And the namechangeis so on point!”
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`95) In addition, Defendant Musk andhis brother Kimbal Musk (whosits on Defendant
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`Tesla’s Board of Directors) are under investigation by the SEC for insider trading,
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`arising from a November 2021 tweet in which Defendant Musk askedhis followers if
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`he should sell Tesla stock.
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`96) One day before the tweet, Kimbal Musksold 88,500 Tesla shares. Musk’s followers
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`12
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`said Defendant Musk shouldsell, and he did. Tesla’s stock tumbled after the tweet.
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`97) Most recently, Defendant Musk was 11 dayslate in publicly declaring he had
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`amassed a large stake in Twitter in March 2022. That omission may have earned him
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`$156 million, according to a half-dozen legal and securities experts.
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`98) Defendant Muskis also rumoredto be facing scrutiny by the FBI for allegedly
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`pumping and dumping Dogecoin.
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`99) While the FBI did not confirm the Dogecoin investigation they released a statement
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`saying. “It is important for people to know whatthey’re getting into. Just because
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`someoneis wealthy and seen as smart, that doesn’t mean you should take financial
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`advice from them. We intend to prosecute anyone who partakes in ponzi schemes,
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`pump and dumplike schemes.”
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`100)
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`Since cryptocurrency is not regulated by the SEC, Defendant Muskhas tweeted
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`numeroustimes overthe past three years about Dogecoin to manipulate the price
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`without consequence.
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`DOGECOIN IS A CRYPTO PYRAMID SCHEME
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`101) New York Attorney General Letitia James describes pyramid schemesas,“a
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`fraudulent system of making moneybased on recruiting an ever-increasing number
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`of ‘investors.’”
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`102) Dogecoin is a Crypto Pyramid Scheme because: (a) It has no intrinsic value; (b)It
`
`is not a productive asset; (c) It has no underlying value; (d) The numberofcoinsis
`
`unlimited; (e) The value of Dogecoin is solely derived from the hopethat the price
`
`will rise indefinitely under the “greater fool theory” and(f) the history of trading
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`provesthat the price is directly controlled and manipulated by Defendants.
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`13
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`103)
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`In 2018, Bill Gates described cryptocurrency with the "greater fool theory”
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`saying he would "short it" if he could.
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`104) Warren Buffett said that cryptocurrencies have no value since they don’t produce
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`anything and one’s only hopeis that a “greater fool” comes along to pay more than
`
`you did.
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`105) Wolf of Wall Street Jordan Belfort recently stated that, “Bitcoin & Crypto is a
`
`y?
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`scam!”
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`and that Dogecoinis a, “joke with no real value.”
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`106)
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`In 2019, LendingTree Chief Economist Tendayi Kapfidze described
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`cryptocurrencyas, “a pyramid scheme ... you only make money based on people who
`
`enter after you.”
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`107)
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`In April 2021, managing director of Morgan Creek Capital Management Mark
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`Yusko called out Dogecoin,saying, “It’s Ponzi-nomics,” referencing the fact that it is
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`a ponzi/pyramid scheme.
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`108)
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`In May 2021, it was reported that Paul Krugman, an American economics
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`professor and a Nobel laureate winner described cryptocurrencies as a long-running
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`Ponzi scheme.
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`109)
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`In June 2021, the Federal Reserve Bank of Minneapolis President Neel
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`Kashkari called Dogecoin a Ponzi scheme.
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`110)
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`In August 2021, billionaire hedge fund manager John Paulson predicted that
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`cryptocurrencies (including Dogecoin) will “go to zero.”
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`111)
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`In 2021, Vivaldi CEO Jon von Tetzchnerstated that cryptocurrenciesare, “nothing
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`more than a pyramid scheme posing as currency.”
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`112) American billionaire Charlie Munger (former business partner of Warren Buffet)
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`14
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`stated that he is, “proud for not investing in crypto,”furtherstating that it will one day
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`be “worthless.”
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`113) On February 14, 2022, Reserve Bank of India deputy governor T. Rabi Sankar
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`said that cryptocurrencies are akin to Ponzi schemes or even worse and banning them
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`is the most sensible option for India.
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`114) On July 14, 2021, Dogecoin co-founder Jackson Palmer tweeted nine anti-
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`cryptocurrency tweets including the following: “The cryptocurrency industry
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`leverages a networkof shady business connections, bought influencers and pay-for-
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`play media outlets to perpetuate a cult-like “get rich quick” funnel designed to extract
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`new money from the financially desperate and naive.”
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`JURISDICTION
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`115)
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`Plaintiff invokes this Court’s diversity jurisdiction as the case involvesparties
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`from multiple states with allegations in excess of $75,000; Plaintiff alternatively
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`invokesjurisdiction under Civil RICO and the Class Action Fairnessact as the dispute
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`involves monetary damages in excess of $5,000,000. The Court also has jurisdiction
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`because Defendant Musk appeared on Saturday Night Live in this district where he
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`committed someof the tortious acts described in this complaint. The Court has
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`supplementaljurisdiction over the claims made under New YorkState law.
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`VENUE
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`116)
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`Venueis proper in the Southern District of New York because defendants are
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`jointly engaged in wrongful conductin this district, and Defendants have minimum
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`contacts with this district such that exercising jurisdiction is just and reasonable.
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`15
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 16 of 26
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`PARTIES
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`117)
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`Plaintiff Keith Johnson is an American citizen who was defrauded out of money
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`by Defendants’ Dogecoin Crypto Pyramid Scheme.
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`118) Defendant Elon Muskisa partner in the Dogecoin Crypto Pyramid Schemeand
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`CEO of SpaceX and Tesla, Inc.
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`119) Defendant Space Exploration Technologies Corp dba SpaceXis a private
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`corporation with headquarters located 1 Rocket Road, Hawthorne, California 90250.
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`120) Defendant Tesla, Inc. is a public corporation with headquarters located at 13101
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`Harold Green Road, Austin, Texas 78725.
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`CLAIMS FOR RELIEF
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`CLASS ACTION ALLEGATIONS
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`121)
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`The class is initially defined as all individuals or entities who have lost money
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`buying, selling, and/or trading, Dogecoin, since at least April 2019.
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`122) This action is properly maintainable as a class action.
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`123)
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`The class is so numerousthat joinder of all members is impracticable.
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`124)
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`The number andidentities of class members can be determined through crypto
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`exchanges, the Dogecoin blockchain, and voluntary disclosure by class members.
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`125)
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`The disposition of their claimsin a class action will be of benefit to the parties and
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`the court.
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`126) Acclass action is superior to other methodsfor the fair and efficient adjudication of
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`the claims herein asserted, and no unusualdifficulties are likely to be encountered in
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`the managementofthis action as a class action.
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`127)
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`Thelikelihood of individual class members prosecuting separate claims is remote.
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`128) There is a well-defined community of interest in the questions of law and fact
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`involved affecting membersofthe classes.
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`129) Among the questions of law and fact which are common to the class, and which
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`predominate over questions affecting any individual class memberare, the following:
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`130) Whether Defendants violated Civil RICO;
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`131) Whether Defendants have violated federal and state gambling laws;
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`132) Whether Defendants have engaged in commonlaw fraud;
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`133) Whether Defendants are engaged in a fraud akin to a pyramid scheme;
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`134) Whether Defendants violated N.Y.S. G.B.L. § 349;
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`135) Whether Defendants violated N.Y.S. G.B.L. § 350;
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`136) Whether Defendants are liable for products liability through their failure to warn;
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`137) Whether Defendants’ unlawful acts resulted in unjust enrichment;
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`138) Whether Plaintiffs and the classes are entitled to injunctive and equitable relief;
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`139) Whether Defendants’ acts were willful entitling Plaintiff and the class to treble
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`and/or punitive damages.
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`140)
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`Plaintiff is a memberofthe class and is committed to prosecuting this action.
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`141)
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`Plaintiff’s claims are typical of the claims of the other membersofthe class.
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`142)
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`Plaintiff does not have interests antagonistic to or in conflict with those they seek
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`to represent. Plaintiff is, therefore, an adequate representative of the proposedclass.
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`143)
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`The likelihood of individual class members prosecuting separate individual
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`actions is remote due to the relatively small loss suffered by class members as
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`compared to the burden and expense of prosecuting litigation of this nature and
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`magnitude.
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`17
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`144) Absent a class action, Defendants are likely to avoid liability for
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`their
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`wrongdoing, and the class members are unlikely to obtain redress for the wrongs
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`alleged herein.
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`145) Adjudication of this case on a class-wide basis is manageable bythis court.
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`FIRST CAUSE OF ACTION
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`CIVIL RICO — WIRE FRAUD
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`146)
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`Plaintiff repeats and reiterates all previous paragraphs of this complaintas if fully
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`set forth in this cause ofaction.
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`147) Defendants’ purchasing, marketing, advertising, promoting, and manipulating
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`Dogecoin on the internet, inclusive of exchanges, in the United States and
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`internationally since April 2019 constitutes an illegal wire fraud enterprise.
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`148) Dogecoin is a Crypto Pyramid Schemecreated, promoted, and advertised by
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`Defendants Musk,Tesla, Inc. and SpaceX, together with their servants, agents,
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`employees, and volunteers.
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`149) Defendants falsely and deceptively claim that Dogecoin is a legitimate investment
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`whenit has no valueatall.
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`150) Defendant Musk falsely stated that, “Dogecoin is money.”
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`151) Defendant Musk has encouragedPlaintiff and the class to buy and sell Dogecoin.
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`152) Defendant Musk’s tweets are repeated millions of times by Dogecoin holders, as
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`well as on social media and the general media.
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`153) Defendants and their servants, agents, and employees have deceived Plaintiff and
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`the class into believing that Dogecoin is a valuable asset worth purchasing, holding
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`and trading.
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`18
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`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 19 of 26
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`154)
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`Plaintiff and the class of Dogecoin holders and adopters would not have purchased
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`Dogecoin if not for Defendants’ fraudulent claims regarding the perpetual rising price
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`of Dogecoin.
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`155)
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`Since Defendants inflated the Dogecoin Market Cap to $93 billion from $250
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`million, and it is now under $7 billion at the time this lawsuit wasfiled, Plaintiff and
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`the class demands $86 billion in compensatory damagesand $172billion in treble
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`damages, including damagessuffered by Plaintiff.
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`SECOND CAUSE OF ACTION
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`CIVIL RICO - GAMBLING
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`156)
`
`Plaintiff repeats and reiterates all prior paragraphs of this complaintas if fully set
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`forth in this cause ofaction.
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`157) Gamblingis accepting, recording, or registering bets, or carrying on a policy game
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`or any otherlottery, or playing any game of chance, for moneyorother thing of value.
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`158) On April 12, 2022, Dogecoin co-creator Shibetoshi Nakamoto tweeted that,
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`“cryptocurrency buying and selling is not investing. It is gambling.”
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`159)
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`In January 2022, the Guardian published an article stating that, “‘Trading is
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`gambling, no doubt aboutit’ — how cryptocurrency dealing fuels addiction. Fears rise
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`over how unregulated trading and promotion of crypto assets are creating a new
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`generation of addicts.”
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`160)
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`In July 2021, Chris Larse President of Ripple stated that, “There is not any
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`distinction between investing in Dogecoin and touring to Las Vegas.”
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`161)
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`In July 2021, MicroStrategy CEO Michael Saylor drew parallels between buying
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`Dogecoin and playing roulette in Las Vegas saying that, “I’m gonna buy Dogecoin
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`19
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`Case 1:22-cv-05037 Document 1 Filed 06/16/22 Page 20 of 26
`Case 1:22-cv-05037 Document1 Filed 06/16/22 Page 20 of 26
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`before Elon Musk goes on Saturday Night Live (is like) I’m gonna go to Vegas and
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`I’m goingto bet on black.”
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`162)
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`In 2021, Mad Money’s TV host Jim Cramersaid, “I think dogecoin (buying)... is
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`actually gambling, not investing.”
`
`163)
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`In 2021, Shark Tank star Kevin O’Leary said that, “When you speculate on
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`something like Dogecoin, that’s no different that going to Las Vegas and putting your
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`money on red or black.”
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`164) Defendants have violated and continue to violate Title 18, U.S.C., Sec. 1955,
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`(federal c