Solana DEX Meteora Faces Lawsuit Over Meme Coin ’Pump-and-Dump’ Scheme
Another day, another DeFi drama—Meteora’s latest token launch draws regulator scrutiny and trader fury. The Solana-based DEX stands accused of orchestrating a classic pump-and-dump with its meme coin offering, proving once again that ’decentralized’ doesn’t mean ’unscrupulous-free.’ Plaintiffs allege insider trading patterns and suspicious token burns, while the platform claims it’s just ’organic market activity.’ Either way, someone’s getting rekt—and it’s probably retail investors.
He said, she said
According to a blog post that introduced the platform in December, the M3M3 token was created by a “passionate community” of people who believed in the platform’s potential.
But the suit alleges otherwise.
“Publicly, M3M3 was presented as a Meteora project,” the suit reads. “In reality, M3M3 was a collaboration between Meteora and Chow, on the one hand, and defendant Kelsier, a venture capital firm run by the Davis defendants (a father and two sons),” adding that the defendants concealed their involvement.
The suit further alleges that the defendants used 150 insider wallets to dominate the token supply and systematically “freeze” and “thaw” the launch pool of tokens, ultimately gaining secret control of around 95% of the tokens within 20 minutes of the launch.
“The federal securities laws are intended to warn investors of undisclosed risks and protect them from fraud,” the suit reads. “Had defendants complied with the registration and disclosure requirements applicable to M3M3, plaintiffs and other non-insider investors would not have purchased M3M3 tokens at inflated prices or suffered the resulting losses.”
The plaintiffs are being represented by prominent crypto law firm Burwick Law and Hoppin Grinsell LPP.
Last month, Burwick filed a lawsuit against Meteora and Kelsier Ventures for their involvement in the LIBRA token launch, a meme coin scandal that shook markets and politics in February, resulting in Chow’s resignation from Meteora. LIBRA was promoted by Argentine President Javier Milei before its price crash.
In March, an Argentine lawyer asked Interpol to assist in the arrest of Hayden Davis, a named defendant in that suit, due to his alleged connection to the LIBRA scandal.
Though it had a brief spike shortly after its launch, M3M3 is down more than 98% from its all-time high of $0.186 on December 12, and is now trading at just $0.003.
Representatives for Meteora, Kelsier, and Burwick Law did not immediately respond to Decrypt’s request for comment.
Edited by Sebastian Sinclair
