A
class-action lawsuit
brought before the Southern District of New York alleges that Meteora co-founder Benjamin Chow masterminded a $57 million
memecoin
scam, using endorsements from celebrities such as Melania
Trump
and Argentina’s President Javier Milei to manipulate token values and deceive investors. The suit, initiated by Omar Hurlock, Anuj Mehta, and John Winslow, claims Chow and his team turned Meteora’s Solana-based platform into a “fraud factory” disguised as a decentralized finance (DeFi) initiative, according to a
Bitget report
. Tokens like $LIBRA and $MELANIA experienced dramatic price spikes before crashing, resulting in significant investor losses.
The operation, referred to as the "Meteora-Kelsier Enterprise," allegedly used insider-controlled liquidity pools and fake endorsements. The complaint states that wallets associated with the group provided liquidity and made early trades to create the illusion of demand, enabling insiders to sell tokens at inflated prices. For instance, the $LIBRA token—marketed as a means to help small businesses in Argentina—soared after Milei’s verified X post, but plummeted within hours when deployer wallets removed $110 million in liquidity, as reported by
The Block report
. Similarly, $MELANIA, which was linked to Melania Trump, dropped over 60% in a matter of days, according to a
Coinotag article
. The plaintiffs contend that celebrities were simply used as “props” to lend credibility to the scheme, without any real involvement, a point also made in a
Yahoo report
.
The lawsuit demands full restitution and triple damages under U.S. RICO statutes, citing allegations of fraud, conspiracy, and deceptive conduct. It also names Kelsier Ventures CEO Hayden Davis,
Jupiter
co-founder Ng Ming Yeow, and other associates as defendants. Blockchain investigations by firms such as
Bubblemaps
uncovered wallet connections between $LIBRA and $MELANIA, supporting claims of coordinated dumping, according to a
CryptoTimes report
. The plaintiffs also point to at least 15 other similar tokens, including $ENRON, $M3M3, and $TRUST, as part of a wider pattern described in a
LiveBitcoinNews piece
.
The case has attracted attention due to its political connections. Although Milei’s anti-corruption office cleared him of any ethics breaches, his initial endorsement of $LIBRA and the later removal of his post have raised questions. The updated complaint asserts that these figures “were used as props,” as noted in a
Benzinga article
. In addition, a
4.2 million airdrop
to addresses linked to Trump surfaced just hours after the lawsuit was filed, fueling speculation about possible pardons for crypto personalities facing prosecution. Reports indicate that the Trump family’s crypto activities, including $TRUMP and $MELANIA tokens, have generated $1 billion in pre-tax profits over the past year.
The downfall of these tokens highlights the risks within the memecoin sector, where celebrity backing can conceal manipulative tactics. Experts point out that Solana’s fast deployment features made the scheme possible, allowing insiders to control both trading and liquidity. As the legal proceedings continue, the case could lead to tighter regulations on DeFi projects and memecoins, especially those that use prominent public figures for promotion.
