Solana’s Meteora Hit With Lawsuit Over Alleged Meme Coin Scam

Solana-based decentralized alternate Meteora is dealing with a class-action lawsuit over pump-and-dump claims surrounding the M3M3 meme coin launch.

The criticism alleges this led to losses of at the least $69 million between December 2024 and February 2025.

Rug Pull Allegations

Within the April 21 submitting with the U.S. District Court docket for the Southern District of New York, the plaintiffs accused Meteora and its founder, Benjamin Chow, of deceptive buyers. It additionally named enterprise agency Kelsier Labs and several other of its executives, together with Chairman Thomas Davis and his sons Hayden and Gideon, in claims of manipulating the worth of the Solana-based token to revenue on the expense of the general public.

“Collectively, defendants covertly orchestrated the purportedly public launch of M3M3 on Meteora to restrict preliminary gross sales to defendants and a tightly-controlled group of insiders,” legal professionals for the petitioners wrote.

In keeping with the criticism, insiders behind the M3M3 mission quietly acquired as a lot as 95% of the token provide inside 20 minutes of launch utilizing over 150 wallets. Throughout this era, entry to public consumers was allegedly restricted, which allowed them to inflate the token’s value by way of inner trades artificially.

As soon as the worth spiked, they offered their holdings, resulting in a pointy market crash simply days after the rollout. The accusers argue that the defendants then made calculated efforts to reinflate the token’s value in an try to revive investor belief, however this did not deliver long-term stability.

The swimsuit additionally claims the alleged offenders hid their identities and affiliations all through the method, deceptive the general public into believing the coin was launched pretty.

Stake-Primarily based Cash Needs to be Securities

A weblog post printed in December 2024 launched Meteora’s platform as a direct response to the “pump-and-dump” points affecting meme coin markets. On the time, Chow is alleged to have promoted M3M3 as a safe, stake-backed asset designed to supply long-term worth.

Buyers have been additionally reportedly assured that the launch can be totally clear and accessible to the general public, with staking rewards generated from transaction charges on the Meteora platform.

Nonetheless, the April swimsuit claims that these statements have been deliberately misleading. The submitting additional seeks regulatory readability by calling for stake-based meme cash like M3M3 to be formally categorized as securities. Burwick Legislation notes that such classification might affect how any new movie star or political token is dropped at market on Solana.

In the meantime, Kelsier Ventures, KIP Protocol, and Meteora are additionally dealing with a separate class-action case lodged in March over the collapse of the LIBRA token. Throughout that incident, insiders have been accused of exploiting personal liquidity mechanisms to promote at peak costs, leaving strange merchants uncovered to losses.

Chow has since resigned from his management place in Meteora amid suspicions of insider buying and selling and monetary misconduct linked to the LIBRA fallout.