First Lady Melania Trump’s memecoin, known as $MELANIA, is currently facing legal challenges as new court filings allege it is part of a larger fraudulent scheme aimed at inflating the value of cryptocurrencies before selling them off to pocket hefty profits. This recent lawsuit broadens an already filed complaint by cryptocurrency traders from April, which claims that a group of developers behind various memecoins, including $M3M3, $LIBRA, $ENRON, and $TRUST, orchestrated a so-called “pump-and-dump” scheme.
$MELANIA, which launched in January, coincided with Donald Trump’s inauguration. The lawsuit asserts that the developers manipulated the launch of these tokens, misleading investors into thinking they were part of legitimate products, while they actually profited at the expense of those who bought in. Although the suit does not accuse Melania Trump of any wrongdoing, it describes her endorsement as a form of “window dressing,” enhancing the project’s credibility without her knowledge of any underlying fraud.
Plaintiffs argue that if Melania Trump’s team had been aware of the alleged scheme, they would have immediately withdrawn their support. The White House and the involved legal teams have yet to provide a comment on the ongoing litigation.
The lawsuit claims that the $MELANIA token, rather than being a legitimate cryptocurrency, misused the First Lady’s image and public trust, creating an illusion of legitimacy that led investors to believe they were participating in a celebrity-endorsed innovation. In reality, the scheme was designed to enrich a select group of insiders while causing losses for many others.
According to the allegations, the developers employed a systematic approach to launching new memecoins, characterized by artificially inflating their values and subsequently cashing out their holdings when prices peaked. They allegedly had privileged access to the Solana blockchain, which allowed them to control the supply and demand of their tokens. Paid promotions and influencer endorsements, including that of Melania Trump, were used to create a façade of genuine enthusiasm for these coins.
The value of $MELANIA has seen significant fluctuations; after an initial market capitalization exceeding $2 billion at launch, it has since fallen sharply, leading to a current valuation of $85.06 million. The decline has been attributed to the alleged selling off of insider shares while the tokens were at their peak.
In light of these developments, questions linger regarding the potential trial process and what the plaintiffs are seeking in their case. They are calling for the defendants to return any profits earned from the alleged fraud, ensure they cannot engage in similar schemes in the future, and appoint an independent receiver to manage the relevant transactions linked to the Solana blockchain.
Overall, this controversy not only highlights the volatility inherent to cryptocurrency investments but also raises significant concerns regarding celebrity endorsements in the digital currency space. Melania Trump’s ventures, including $MELANIA, form a considerable part of her estimated $20 million net worth, along with her various other projects.
