Melania Trump Used as ‘Window-Dressing’ in Elaborate Memecoin Fraud, Legal Filing Claims

A cryptocurrency Promoted in January US First Lady Melania Trump was part of a sophisticated fraud that “leveraged celebrity associations and borrowed fame to sell legitimacy to unsuspecting investors,” a new legal filing alleges.

In April, crypto investors brought a federal class action lawsuit against Benjamin Chow, co-founder of crypto exchange Meteora, and Hayden Davis, co-founder of crypto venture capital firm Kelsea Labs, accusing them of a multimillion-dollar fraud involving a single memecoin, $33.

Later, the plaintiffs filed an amended complaint, expanding the allegations to include harassing activity. They claimed the pair conspired to rig the market for $LIBRA, a currency Promoted by Javier MileiPresident of Argentina, which collapsed in value shortly after launch.

On Tuesday, the plaintiffs sought the court’s permission to file another amended complaint based on information allegedly provided by an anonymous whistleblower. The pair launched, pumped and dumped at least 15 crypto coins, with Chow acting as the “commander,” the proposed second amended complaint alleges, including $Melania. The scheme allegedly cost unwitting investors millions of dollars.

Trump, who is not a named defendant in the lawsuit, was used as “window dressing for crimes engineered by Meteora and Kelsea,” the proposed second amended complaint alleges. The filing also states that the plaintiffs do not allege that Trump or Miley “directed the scheme.”

“This case may clarify early expectations for token launches and releases in the US. We understand many across the crypto industry and regulatory community are following closely,” said Max Berwick, senior managing partner at Berwick Law, the law firm representing the plaintiffs.

The White House, Chow and Davis did not immediately respond to requests for comment.

When Chow and Davis launched $Melania in January, they refined a “repeatable six-step ‘playbook'” for pump-and-dump fraud, the investors claim.

According to the proposed Second Amended Complaint, Meteora controlled the technological infrastructure, while providing the capital Kelsea needed and conducting promotional campaigns, relying heavily on credibility borrowed from public figures or brands. Together, the filing alleges, they effectively control a network of “sniper” crypto wallets that artificially snap up large amounts of coins at discounted prices, which regular investors then dump on the market as hoarders.

“I’m going to try to tell all my friends early,” Davis told an acquaintance before the Melania launch, in a private exchange that features in redacted form as an exhibit to the lawsuit. “I’m about to launch the biggest token ever.” (It’s unclear whether Davis is allegedly referring to $Melania or $Libra.)