Melania Trump is being used as a ‘window’ into the elaborate Memecoin scam, the lawsuit claims.
A new lawsuit alleges that a digital currency promoted in January by US First Lady Melania Trump was part of a sophisticated scam that “used celebrity associations and ‘borrowed fame’ to sell legitimacy to unsuspecting investors.”
In April, crypto investors filed a federal class-action lawsuit against Benjamin Chow, founder of crypto exchange Meteora, and Hayden Davis, founder of crypto venture capital firm Kelsier Labs, among other defendants, accusing them of a multimillion-dollar fraud involving a potential M3M3.
Later, the plaintiffs filed an amended complaint, expanding the allegations to include armed robbery activity. They alleged that the pair conspired to rig the market for the LIBRA dollar, a coin promoted by Argentine President Javier Maile, which plummeted in value shortly after its launch.
On Tuesday, the plaintiffs asked the court to file another amended complaint based on alleged information provided by an anonymous whistleblower. While Chow acted as “commander,” the pair launched, pumped and dumped at least 15 cryptocurrencies, the proposed second amended complaint alleges, including $MELANIA. It is said that the scheme has caused millions of dollars in losses to unsuspecting investors.
The second proposed amended complaint alleges that Trump, who is not named as a defendant in the complaint, was used as “window dressing for the crime orchestrated by Meteora and Kelsier.” The filing also states that the plaintiffs do not allege that Trump or Miley “executed the scheme.”
Max Burwick, senior managing partner at Burwick Law, the law firm representing the plaintiffs, said: “This case could clarify fundamental expectations for the launch and disclosure of tokens in the US. We know that much of the crypto industry and regulatory community will be watching closely.”
The White House, Chow and Davis did not immediately respond to requests for comment.
Investors claim that by the time Chow and Davis launched $MELANIA in January, they had perfected a repetitive “six-step playbook” for the pump-and-dump scam.
According to the second proposed amended complaint, Meteora controls the technical infrastructure, while Kelsier provides the necessary capital and orchestrates the advertising campaign, relying heavily on credit borrowed from public figures or brands. The filing alleges that they effectively control a network of “sniper” crypto wallets that steal large amounts of coins at artificially discounted prices, then release them onto the market as ordinary investors pile in.
“I’m trying to tell all my friends early,” Davis told an acquaintance before launching $MELANIA on a private exchange that appears in redacted form as an exhibit in the lawsuit. “I’m about to launch the biggest token ever.” (It is unclear whether Davis was apparently referring to $MELANIA or $LIBRA.)
