The creators of the Melania Trump meme coin are facing serious accusations of orchestrating a fraudulent scheme, according to a lawsuit filed by cryptocurrency investors. This legal action, highlighted in a report, claims that Benjamin Chow, cofounder of the crypto exchange Meteora, and Hayden Davis, cofounder of the venture capital firm Kelsier Labs, conspired to engage in “pump-and-dump” operations involving numerous meme coins, including the Melania coin.
In the context of cryptocurrency trading, a pump-and-dump scheme typically involves promoters artificially inflating the price of an asset through misleading information before selling off their holdings when the price peaks, leaving other investors to deal with significant losses. The proposed amended complaint indicates that Chow and Davis devised a systematic six-step “playbook” for executing this type of fraud, which they allegedly employed on multiple occasions prior to the launch of the Melania coin, culminating in millions of dollars lost by investors.
The lawsuit does not accuse Melania Trump of any wrongdoing, suggesting instead that her name was leveraged as a façade for a fraudulent scheme by Chow and Davis. Investors are said to have interpreted the association with Melania Trump as a sign of legitimacy, trusting that her involvement would not align with fraudulent activities.
In a striking comparison, the complaint recalls President Donald Trump’s troubled history with financial dealings, noting his past convictions. It argues that investors rightfully assumed that Melania Trump’s name and likeness lent credibility to the cryptocurrency, enhancing its perceived value.
Chow and Davis are also implicated in another cryptocurrency venture linked to Argentine President Javier Milei, which similarly plummeted shortly after its launch. This raises further questions about their credibility in emerging markets.
Max Burwick, the attorney representing the plaintiffs, expressed the potential impact of this case on future token launches and regulatory expectations in the United States, suggesting that a favorable ruling could provide much-needed clarity to investors navigating the unpredictable landscape of cryptocurrency.
Market performance data illustrates the decline of the Melania meme coin, which has reportedly dropped over 95% since its February launch, now trading at under 10 cents per unit. This steep depreciation emphasizes the growing volatility and risks associated with such digital assets.
Further complicating matters for the Trump family, recent reports indicated that they enriched themselves significantly during the public market launch of Donald Trump’s own cryptocurrency, amounting to claims of $5 billion in additional wealth, a situation described as potentially one of the most significant corruption cases in presidential history. Meanwhile, Melania Trump’s direct involvement with the meme coin remains unverified, yet her name bears the weight of the allegations tied to it.
