Solana's Meme Coin Project Sued for Accusations of Fraudulent Scheme
Decentralized Exchange Meteora Sued Over M3M3 Meme Coin Manipulations
The Solana-based crypto platform Meteora is swirling in controversy, accused of orchestrating a pump-and-dump scheme surrounding the launch of the M3M3 meme coin. Theclaims led to losses of at least $69 million between December 2024 and February 2025.
A Cunning Rug Pull?
On April 21, a lawsuit was filed with the U.S. District Court for the Southern District of New York, naming Meteora, its founder Benjamin Chow, and various executives as defendants. The suit alleges they covertly manipulated the M3M3 token price for profit, leaving public investors in the lurch.
According to the complaint, insiders acquired as much as 95% of the M3M3 token supply within minutes of launch, using over 150 wallets. Public access to purchasing tokens was allegedly restricted, creating a perfect storm for price manipulation. Insiders inflated the token price through internal trades, ready to dump their holdings and tank the market.
Once the value soared, they cashed out, causing a rapid market crash just days after the rollout. The accusers argue that the defendants then attempted to reflate the token price to regain investor trust, but their efforts were in vain.
The suit also claims the criminals concealed their identities, misleading the public into believing the coin was launched fairly.
Time for Securities Classification?
In a afterthought, a December 2024 blog post introduced Meteora as a response to "pump-and-dump" issues affecting meme coin markets. At the time, Chow promoted M3M3 as a secure, stake-based asset designed for long-term value.
Investors were assured the launch would be transparent and accessible to the public. However, the April suit claims these promises were intentionally deceptive. The filing further seeks regulatory clarity by advocating for stake-based meme coins like M3M3 to be officially classified as securities. Such classification could potentially pave the way for stricter oversight, shielding investors from similar fraud.
Meanwhile, Meteora and other parties are also grappling with a separate class-action lawsuit lodged in March over the LIBRA token collapse. The defendants are accused of exploiting private liquidity mechanisms, leaving ordinary traders exposed to losses.
Chow has since stepped down from Meteora amid suspicions of insider trading and financial misconduct linked to the LIBRA fallout.
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- The lawsuit alleges that Meteora and its executives, including Benjamin Chow, covertly manipulated the price of the M3M3 meme coin for profit.
- The complaint notes that insiders acquired a significant portion of the M3M3 token supply within minutes of launch, using multiple wallets and allegedly restricting public access.
- The accusers argue that the defendants inflated the token price through internal trades, ready to dump their holdings and tank the market, causing a rapid market crash just days after the launch.
- The suit further seeks regulatory clarity, advocating for the classification of stake-based meme coins like M3M3 as securities, which could potentially lead to stricter oversight and protect investors from similar fraud.
- Apart from the M3M3 controversy, Meteora and other parties are also facing a class-action lawsuit over the LIBRA token collapse, with defendants accused of exploiting private liquidity mechanisms and leaving ordinary traders exposed to losses.
- Benjamin Chow has stepped down from Meteora amid suspicions of insider trading and financial misconduct linked to the LIBRA fallout, adding to the platform's growing list of controversies surrounding crypto trading and securities.
