CryptoSlate
A US judge dismissed a proposed class action brought by investors in LIBRA and M3M3, closing the Southern District of New York case with prejudice and denying permission to amend the complaint again. The investors alleged that insiders controlled the memecoin launches and extracted funds from liquidity pools at their expense. LIBRA was promoted by Argentine President Javier Milei, who withdrew his support on the day it launched in February 2025, according to the complaint as recounted by the court.
Why it matters
The investors’ central federal claim relied on RICO, which requires a pattern of related racketeering acts lasting a substantial period or threatening continued criminal activity. Judge Jennifer L. Rochon found neither adequately pleaded against the Kelsier defendants, including Kelsier Ventures and Hayden Davis, or Benjamin Chow, Meteora’s co-founder and former CEO.
The court treated the alleged conduct from October 2024 to the March 2025 complaint as a six-month period, too short on the facts pleaded to establish the required duration. It also found that assertions about repeatable token launches did not show, defendant by defendant, that alleged wire fraud was a regular business practice. The related RICO conspiracy claims failed as well.
Market impact
The judge rejected a proposed amendment that would have added MELANIA, ENRON and TRUST to the case, finding that it extended the alleged period to only seven months and did not cure the continuing-threat defect. After the RICO claims failed, the court dismissed the remaining state-law claims against the Kelsier defendants for lack of personal jurisdiction in New York. Claims against Chow and Meteora failed on separate pleading grounds.
For LIBRA and M3M3 investors, the ruling ends this district-court action as a route to recovery. It does not decide whether the alleged conduct was lawful or settle the status of other possible recovery routes.
Frequently asked questions
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Why did the investors’ RICO claims fail?
The judge found that the complaint did not adequately plead a pattern of related racketeering acts lasting a substantial period or threatening continued criminal activity.
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How long did the court say the alleged conduct lasted?
For the duration analysis, the court treated the alleged conduct from October 2024 through the March 2025 complaint as a six-month period.
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Why could investors not add MELANIA, ENRON and TRUST to the lawsuit?
The judge found that the proposed amendment extended the alleged period to only seven months and did not cure the complaint’s failure to establish a continuing threat.
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What happened to the state-law claims against the Kelsier defendants?
After dismissing the RICO claims, the court dismissed the remaining state-law claims for lack of personal jurisdiction in New York. It did not reach their merits.
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Did the dismissal establish that the alleged conduct was lawful?
No. The ruling addressed the sufficiency of the claims and the court’s jurisdiction. It did not decide whether the alleged conduct was lawful or settle other possible recovery routes.
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