Class Action Lawsuit Alleges Meteora Co-Founder Ran $57M $LIBRA Memecoin Fraud

• Lawsuit filed in Southern District of New York targets Chow and partners for orchestrating a DeFi scam disguised as legitimate projects.

• Tokens like $LIBRA collapsed rapidly after insider dumps, withdrawing over $110 million in liquidity.

• Plaintiffs seek full repayment and triple damages under U.S. RICO laws, citing fraud, conspiracy, and deceptive practices with 60%+ price crashes in days.

Discover the Meteora memecoin fraud lawsuit details, including celebrity endorsements and investor losses. Stay informed on crypto scams and protect your investments today.

What is the Meteora Memecoin Fraud Lawsuit?

The Meteora memecoin fraud lawsuit involves a class action filed in the Southern District of New York against co-founder Benjamin Chow and associates, alleging a $57 million scheme that exploited celebrity fame to dupe investors into buying valueless tokens. Plaintiffs claim the group, dubbed the “Meteora-Kelsier Enterprise,” posed as a DeFi platform while controlling liquidity pools on Solana to inflate and dump prices. This resulted in tokens like $LIBRA and $MELANIA crashing, leaving investors with significant losses while insiders profited.

How Did the Fraudulent Scheme Operate Using Celebrity Endorsements?

The lawsuit details how Chow, along with Hayden Davis of Kelsier Ventures and Jupiter co-founder Ng Ming Yeow, allegedly fabricated endorsements from high-profile figures such as Melania Trump and Argentine President Javier Milei to build investor trust. Court documents describe the operation as a “fraud factory” within Meteora’s Solana-based system, where insiders used deployer accounts to seed liquidity and execute early trades that simulated demand. Wallets tied to the scheme funded these activities, allowing control over trading access and timing dumps at peak prices. According to the complaint, this created a “liquidity trap,” with celebrities serving merely as “window dressing” without actual involvement. Supporting data from on-chain analysis shows over $110 million withdrawn from $LIBRA’s pool alone post-launch, contributing to its hourly collapse despite initial hype from Milei’s verified social media post, which was later deleted.

The lawsuit said this is a “fraud factory” disguised as DeFi allegedly used celebrity fame to lure investors into buying worthless tokens.

A class action lawsuit filed in the Southern District of New York accuses Meteora co-founder Benjamin Chow of orchestrating a $57 million memecoin fraud using celebrity names to attract investors.

The case was filed on Tuesday, Oct 21st, by investors who claimed Chow and his partners used figures like Melania Trump and Argentine President Javier Milei to promote tokens such as $LIBRA, $MELANIA, $ENRON, $M3M3, and $TRUST. The plaintiffs — Omar Hurlock, Anuj Mehta, and John Winslow — allege the group tricked investors through fake endorsements, and insider-controlled liquidity pools to inflate token prices before dumping them for profit.

A “Fraud Factory” Disguised as DeFi

In the court filings, the lawsuit described how the “Meteora-Kelsier Enterprise” operated as a “fraud factory” pretended to be a normal DeFi project. Chow and his partners, including Hayden Davis from Kelsier Ventures and Jupiter co-founder Ng Ming Yeow, allegedly made up stories and borrowed fame from real people to gain trust.

According to the complaint, they used tools inside Meteora’s Solana-based system to control how and when people could trade the tokens. This let insiders buy large amounts early and stop trading when prices were high, which allowed them to dump their coins while investors were left with losses.

Court filings explain that wallets linked to the scheme were used to fund deployer accounts, seed liquidity, and finance early trades that created false demand.

“These faces and brands were used as props to legitimize what was actually a coordinated liquidity trap.” Plaintiffs said that Melania Trump and President Milei were not to blame and were only “window dressing” for the scheme.

Collapse and Legal Fallout

The $LIBRA coin was launched in February 2025 and advertised as a project to support small businesses in Argentina. It gained quick attention after Milei’s verified X account shared its contract address, but the token collapsed within hours after. The complaint says the deployer wallet withdrew over $110 million in liquidity, and left investors with worthless coins. Milei later deleted the post and faced a separate fraud probe, though Argentina’s anti-corruption office said he broke no ethics rules.

The $MELANIA coin followed a similar path, with its price crashing by over 60% within days. Chow stepped down from Meteora in February, saying he had no tokens or insider information. The plaintiffs are seeking full repayment and triple damages under U.S. RICO laws, accusing the group of fraud, conspiracy, and deceptive business practices.

Frequently Asked Questions

What Tokens Were Involved in the Meteora Memecoin Fraud?

The lawsuit highlights tokens like $LIBRA, $MELANIA, $ENRON, $M3M3, and $TRUST, promoted using celebrity associations to draw in investors. These memecoins were launched on Solana via Meteora’s platform, with insiders allegedly manipulating liquidity to ensure rapid price surges followed by dumps, resulting in over $57 million in collective investor losses as documented in court filings.

Why Did the $LIBRA Token Collapse So Quickly?

The $LIBRA token, tied to Argentine economic support, surged initially due to President Javier Milei’s social media mention but crashed within hours as deployers pulled $110 million in liquidity. This left holders with devalued assets, exemplifying the liquidity trap alleged in the suit, where controlled trading on Solana enabled insiders to exit profitably while retail investors suffered immediate losses.

Key Takeaways

• Insider Control in DeFi: The scheme relied on Meteora’s tools to manipulate liquidity pools, allowing early buys and timed dumps that trapped investors.
• Celebrity Exploitation Risks: Fake endorsements from figures like Melania Trump and Javier Milei created false legitimacy, but court documents clarify they were uninvolved props.
• Legal Recourse for Victims: Investors can pursue RICO claims for triple damages, emphasizing the need for due diligence in memecoin investments to avoid such frauds.

Conclusion

The Meteora memecoin fraud lawsuit underscores the vulnerabilities in DeFi platforms where celebrity endorsements can mask manipulative practices, leading to substantial investor harm through tokens like $LIBRA and $MELANIA. As regulatory scrutiny intensifies on Solana-based projects, this case highlights the importance of transparent liquidity management. Investors should prioritize verified projects and on-chain audits to safeguard against similar schemes in the evolving crypto landscape.