Two cryptocurrency entrepreneurs behind tokens promoted by First Lady Melania Trump have been accused of masterminding a large-scale fraud scheme using “celebrity association and borrowed fame” to attract investors, according to an amended federal indictment.
Charges of extortion
The joint lawsuit targets Benjamin Chow, co-founder of crypto exchange Meteora, and Hayden Davis of venture firm Kelsier Labs. It was first filed in April over an alleged multimillion-dollar scam tied to a single memecoin, $M3M3, Wired reported. The complaint has since expanded to include claims of racketeering and market manipulation involving multiple tokens.
The filing accuses the pair of creating a scheme that artificially inflates prices and then offloads their holdings for profit at the expense of retail buyers.
A celebrity-driven “handbook”.
A newly drafted version of the complaint filed Tuesday alleges the duo pumped and dumped at least 15 cryptocurrencies, including $MELANIA, taking advantage of Melania Trump’s image and online tracking.
Chow and Davis created a “repeatable six-step ‘list’ for pump-and-dump scams,” the filing states.Meteora allegedly handled the technical infrastructure while Kelsier financed the launches and managed the promotion.
In the case of $MELANIA, the lawsuit alleges that Kelsier paid crypto influencers to promote the token online.
Melania Trump’s post added to the hype
Melania Trump promoted the coin on X on January 19, the day before Donald Trump’s second inauguration, writing: “The official Melania coin is live! Now you can buy $MELANIA.”
She is not named as a defendant. Lawyers say she was used as “window dressing for the crime engineered by Meteora and Kelsier.”
The investors, the complaint alleges, “reasonably interpreted the use of Melania Trump’s name and likeness as evidence of legitimacy and due diligence — believing that none of her personages would knowingly associate themselves with the fraudulent enterprise.”
Taking over the market behind the scenes
According to the lawsuit, wallets associated with Chow and Davis secretly amassed nearly one-third of the token’s supply before public trading began, meaning “insiders had already cornered the market before a single public buyer could act.”
As the coin rose twelvefold to a peak value of $1.6 billion, insiders reportedly began liquidating their holdings, making millions and triggering a 95 percent crash that left ordinary investors with steep losses.
Abused political credibility
The complaint states that this tactic was also used in coins promoted by Argentine President Javier Milea, including $LIBRA, which also sold out after launch.
“The misuse of Melania Trump’s name compounded the harm,” the filing said. “It eroded public confidence and injected an element of political and cultural credibility into what was effectively a standard pump and dump.”
