New York, October 22, 2025 – A group of cryptocurrency investors has filed an amended class-action lawsuit accusing executives from the Meteora exchange of orchestrating a fraudulent "pump-and-dump" scheme centered on the $MELANIA token. Launched by U.S. First Lady Melania Trump in January, the token surged to $13.73 within hours of its debut before crashing over 99% to roughly $0.10, erasing millions in investor value. The filing, submitted Tuesday in the U.S. District Court for the Southern District of New York, alleges the scheme exploited Trump's celebrity status to lure unsuspecting buyers into a manipulated market.
The lawsuit expands on an earlier complaint from April targeting Benjamin Chow, co-founder of Meteora, a Solana-based decentralized exchange, and Hayden Davis, co-founder of Kelsier Labs, a venture capital firm. Initially focused on fraud involving the $M3M3 token, the case now claims a broader racketeering enterprise affecting at least 15 meme coins, including $MELANIA and $LIBRA, a token promoted by Argentine President Javier Milei that also collapsed post-launch. Plaintiffs allege Chow and Davis used a repeatable strategy: securing insider access to tokens at discounted prices through "sniper wallets," hyping them via paid influencers and celebrity endorsements, inflating prices with coordinated buys, and then dumping holdings to trigger crashes, leaving retail investors with heavy losses.
The $MELANIA token launched on January 19, one day before President Donald Trump’s second inauguration. Promoted by Melania through her company MKT World LLC on X with the post, "The Official Melania Meme is live! You can buy $MELANIA now," the token started at a few cents and briefly hit a $2.15 billion market cap amid inauguration hype. Blockchain data shows wallets linked to Meteora and Kelsier acquired nearly a third of the $MELANIA supply before public trading, allegedly cornering the market.
The complaint argues that investors trusted Melania Trump’s name and likeness as a sign of legitimacy, believing someone of her stature would not associate with fraud. It accuses the defendants of using high-profile figures like Trump as "window dressing" to promote the scheme, without implicating her in the operational fraud. The alleged manipulation reportedly netted insiders millions, while the $MELANIA crash contributed to $2 billion in collective losses across related tokens, according to forensic analysis.
Meteora, which facilitated $MELANIA’s initial trading, has not responded to comment requests from outlets like AFP and Wired. The exchange markets itself as a platform for meme coin creators to "mint and earn fees for life," but critics argue its structure enables manipulation in the lightly regulated DeFi space. Legal experts suggest the case could set precedents for celebrity-backed cryptocurrencies, especially as President Trump pushes pro-crypto policies, such as the GENIUS Act signed in July, which eases digital asset regulations.
The controversy emerges amid the Trump family’s growing crypto ventures, a shift from the president’s earlier dismissal of cryptocurrencies as a "scam." Alongside $MELANIA, Donald Trump launched $TRUMP on January 17 via a Truth Social post celebrating "WINNING!" Branded with imagery from his July 2024 assassination attempt survival – a raised fist over "FIGHT FIGHT FIGHT" – the token soared from cents to $76 overnight, reaching a $15 billion peak before stabilizing at $46 with an $8.3 billion market cap. Like $MELANIA, $TRUMP’s volatility raised ethical concerns, with blockchain trackers estimating backers earned $100 million in fees while small traders suffered losses.
The $MELANIA launch briefly tanked $TRUMP by 45% as capital shifted, highlighting intra-family competition in the crypto space. Crypto venture capitalist Nick Tomaino criticized the timing, calling it "predatory" and warning of investor harm. Former Obama ethics adviser Norman Eisen labeled it "the single worst conflict of interest in the modern history of the presidency," citing Trump’s dual role as regulator and profiteer.
The Trump family’s crypto empire extends further. In September 2024, sons Donald Jr., Eric, and Barron Trump, alongside allies like Zach Witkoff, launched World Liberty Financial (WLF), pitched as a "financial revolution" to disrupt traditional banking. WLF’s $WLFI governance token debuted in October, raising $550 million from 35,000 buyers at $0.015–$0.05 per token. The Trump family holds 60% of WLF, including 22.5 billion $WLFI units. When trading opened on exchanges like Binance in late August 2025, the token hit 40 cents, valuing their stake at $5 billion, though it later dipped 15% to $0.126.
A Financial Times investigation last week estimated the Trump family’s crypto profits at over $1 billion pre-tax since January, spanning meme coins, NFTs, and WLF’s USD1 stablecoin, which holds $208 million in reserves. Eric Trump suggested the figure might be higher, citing ventures like $TRUMP ($385 million realized) and $MELANIA sales. Barron, at 19, has reportedly surpassed Melania’s net worth through his "DeFi visionary" role in WLF. Trump Media & Technology Group, parent of Truth Social, disclosed $2 billion in Bitcoin holdings in July, two-thirds of its $3 billion liquid assets.
Critics, including Senate Democrats Elizabeth Warren and Jeff Merkley, condemn these dealings as unprecedented corruption. Warren called for Treasury investigations into WLF’s USD1, citing GENIUS Act loopholes, while Merkley and Chuck Schumer proposed barring executive branch officials from crypto profits, pointing to a May 2025 $TRUMP gala at Trump National Golf Club where high rollers bid on dinners with the president. A New York Times probe concluded the dealings erode the boundary between private enterprise and government policy, spotlighting Trump’s "crypto president" branding.
The White House has dismissed conflict-of-interest concerns. Press Secretary Karoline Leavitt stated, "Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest." Trump, who vowed at the 2024 Bitcoin Conference to make America the "crypto capital of the planet," has fueled industry growth: Bitcoin hit record highs post-inauguration, and his administration halted SEC probes into allies like Justin Sun, a $75 million $WLFI buyer named WLF advisor.
On X, reactions to the $MELANIA lawsuit range from mockery to anger. One trader quipped, "$MELANIA is now down 99.67% from ATH... greedy family," while another decried the "corruption orbiting Trump." A meme coin enthusiast lamented the family’s "pump and dump" dynamics, noting $TRUMP’s 90% drop from $80. An activist included the lawsuit in daily news roundups, tying it to broader Trump-era controversies.
The lawsuit underscores the risks of meme coins: no intrinsic value, extreme volatility, and minimal oversight. Analyst Grzegorz Drozdz of Conotoxia warned, "Meme cryptocurrencies like these are prone to large fluctuations... and we generally consider them as speculative assets." As the case progresses, it raises questions about whether celebrity appeal can mask fraud or if $MELANIA signals the unraveling of a gilded crypto empire. The court’s ruling will shape the narrative, but for now, the tokens’ saga serves as a cautionary tale in the wild west of digital assets.
