US Judge Dismisses Class Action Lawsuit Against LIBRA and M3M3 Memecoins

A US district court judge has dismissed an amended complaint against the memecoins LIBRA and M3M3 with prejudice, effectively closing the case in the Southern District of New York. The ruling, issued on Sept. 29 by Judge Jennifer L. Rochon, also denied the plaintiffs permission to amend their filing further.

The lawsuit centered on allegations that insiders managed token launches and drained funds from liquidity pools to the detriment of other investors. LIBRA, which launched on Feb. 14, 2025, was notably promoted by Argentine President Javier Milei, who withdrew his support on the same day.

The plaintiffs' primary federal claim was based on the Racketeer Influenced and Corrupt Organizations Act, or RICO. To succeed, the claim required evidence of a pattern of racketeering activity that either spanned a significant duration or posed a threat of ongoing criminal conduct. The court determined that the plaintiffs failed to establish either form of continuity against the defendants, which included Kelsier Ventures, Hayden Davis, and former Meteora CEO Benjamin Chow.

Regarding the duration of the alleged activity, the court viewed the period from October 2024 through the March 2025 complaint as lasting only six months. The judge noted that this timeframe was insufficient under Second Circuit precedent. Furthermore, the court found that the plaintiffs' assertions regarding a repeatable business model for token launches did not sufficiently demonstrate that wire fraud was a regular practice of the defendants.

The court also rejected an attempt to expand the lawsuit to include the tokens MELANIA, ENRON, and TRUST. The judge concluded that this proposed amendment would have only extended the alleged racketeering period to seven months and failed to address the underlying defects regarding the threat of continued criminal activity.

Following the failure of the RICO claims, the court dismissed remaining state-law claims against the Kelsier defendants due to a lack of personal jurisdiction, noting that allegations involving nationwide social media and crypto infrastructure were insufficient to establish connections to New York. Claims against Benjamin Chow were dismissed for pleading defects, including a lack of sufficient evidence regarding fraudulent intent, while claims against Meteora failed because it was not properly identified as a legal entity capable of being sued.

While the ruling represents a setback for investors seeking recovery through this specific legal action, the court noted that the order does not determine the legality of every alleged act or preclude other potential avenues for recovery.