A recently filed legal complaint has raised serious allegations against prominent figures in the cryptocurrency sector, linking their activities to a sophisticated fraud scheme involving a cryptocurrency promoted earlier this year by Melania Trump, the former First Lady of the United States. The inquiry centers on a specific memecoin, $M3M3, which has been at the center of a federal class action lawsuit initiated by investors in April.
The lawsuit identifies Benjamin Chow, a co-founder of the crypto exchange Meteora, and Hayden Davis, co-founder of the crypto venture capital firm Kelsier Labs, among several other defendants. Plaintiffs have accused the duo of perpetrating a multimillion-dollar fraud that misled unwitting investors by exploiting celebrity endorsements for credibility.
In an amended complaint filed later, the plaintiffs expanded their allegations to include accusations of racketeering. They claim that Chow and Davis conspired to manipulate the market for another coin, $LIBRA, endorsed by Javier Milei, the president of Argentina, which notably collapsed shortly after its launch.
On Tuesday, the plaintiffs sought permission to file a second amended complaint, bolstered by information allegedly supplied by an anonymous whistleblower. According to this latest filing, Chow acted as the “commander” of a scheme that purportedly involved the launch, promotion, and subsequent dumping of at least 15 cryptocurrency coins, including $MELANIA. This operation reportedly caused substantial financial losses for many investors who believed they were participating in legitimate offerings.
While Trump is not listed as a defendant in the lawsuit, the plaintiffs claim her association was used as “window dressing for a crime engineered” by the companies involved. They stated explicitly that they do not allege Trump or Milei were direct operatives of the fraudulent scheme.
Max Burwick, the senior managing partner at Burwick Law representing the plaintiffs, emphasized that the case could establish essential guidelines for token launches and disclosures in the United States, attracting significant attention from both the crypto industry and regulators.
Chow and Davis have not responded to requests for comments on the allegations. According to the investors, by the time of the $MELANIA launch, Chow and Davis had developed a “repeatable six-step ‘playbook’ for pump-and-dump fraud.”
The proposed second amended complaint suggests that Meteora manages the technical aspects, while Kelsier provides funding and organizes promotional campaigns that largely rely on the borrowed credibility of well-known individuals or brands. The filing accuses them of controlling a network of so-called “sniper” crypto wallets that purchase large quantities of coins at artificially low prices and then sell them as general investors begin to buy in.
Adding further intrigue, a redacted private exchange included in the lawsuit features Davis stating to a friend, “Going to try to tell all my buddies early… I’m about to launch the biggest token ever lol.” It remains unclear whether this comment pertained to $MELANIA or $LIBRA, leaving open questions about the future ramifications of the ongoing case.
