Meteora and its former CEO Benjamin Chow have secured the dismissal of a U.S. class action that accused them and Kelsier Ventures of fraud and racketeering tied to the LIBRA and M3M3 memecoin launches.
Summary
- A New York federal judge dismissed the LIBRA class action against Meteora, former CEO Benjamin Chow and the Kelsier defendants, with the amended complaint dismissed with prejudice and the case closed.
- The court found plaintiffs had not sufficiently shown that Meteora was an unincorporated association or partnership capable of being sued under the claims presented.
- Claims against Chow were dismissed after the court found allegations involving his technical assistance, knowledge of the LIBRA launch and Meteora transaction fees did not adequately establish fraudulent intent.
- RICO claims against the Kelsier defendants failed after the court found the alleged activity did not establish the continuity required for a pattern of racketeering.
- The US case has ended, while separate legal proceedings concerning LIBRA and funds tied to its launch have continued in Argentina.
According to a Sept. 29 opinion and order from the U.S. District Court for the Southern District of New York, Judge Jennifer L. Rochon granted motions to dismiss filed by Chow and the Kelsier defendants, while Dynamic Labs secured dismissal of the claims brought against Meteora. gov.uscourts.nysd.642202.274.0
Rochon denied plaintiffs Omar Hurlock and Anuj Mehta permission to file a second amended complaint, finding that the proposed changes would not cure the deficiencies identified by the court. The amended complaint was dismissed with prejudice and the clerk was directed to close the case.
The lawsuit had accused Kelsier Labs, Hayden Davis, Gideon Davis, Thomas Davis, Meteora and Chow of fraud, conspiracy to defraud, violations of the Racketeer Influenced and Corrupt Organizations Act, violations of New York consumer protection law and unjust enrichment.
Meteora claims dismissed over its legal status
A key part of the ruling centered on whether Meteora itself could be treated as a legal entity capable of being sued.
Dynamic Labs argued that Meteora was software rather than an unincorporated association or partnership. Plaintiffs had described Meteora as an association made up of Chow and several other people and entities involved in developing and operating its programs on Solana.
Rochon found that the complaint did not sufficiently establish Meteora as an unincorporated association under either New York or federal law. Plaintiffs pointed to Meteora’s team, governance arrangements, job postings and the multisignature process used to modify its software, but the court found those allegations did not establish the type of coordinated membership and common purpose required for an association.
The court similarly rejected the argument that Meteora could be treated as a partnership, leaving the plaintiffs unable to establish that the protocol had the legal existence required for the claims brought against it.
The decision ended litigation that began in March 2025, when investors filed a class action over LIBRA and accused parties involved in the token launch of misleading buyers and manipulating liquidity. crypto.news previously reported that the complaint alleged insiders withheld a large portion of LIBRA’s supply and extracted funds after trading opened.
LIBRA was launched on Solana on Feb. 14, 2025, before Argentine President Javier Milei posted about the project on X. His post linked to the Viva La Libertad website and included the token’s contract address, prompting a rush of trading before its price collapsed hours later.
Benjamin Chow cleared from the class action
Claims against Chow, Meteora’s co-founder and former CEO, were dismissed separately under Rule 12(b)(6), which allows a court to dismiss claims that fail to state a legally sufficient case.
Plaintiffs had tied Chow to both M3M3 and LIBRA. The complaint alleged he worked with Kelsier on the M3M3 platform and provided technical support around token launches. For LIBRA, the allegations included assistance with Meteora’s liquidity infrastructure before the token went live.
Rochon found that the allegations did not adequately establish Chow’s fraudulent intent. His knowledge that Kelsier would launch LIBRA using Meteora, his technical assistance and the fees earned through the protocol were not enough to plausibly show that he intended to participate in the alleged fraud.
Chow had previously said Meteora’s involvement in LIBRA was limited to technical support, including comments on its liquidity curve and assistance verifying the token after launch. He acknowledged referring some projects looking for deployment services to Kelsier but denied participating in LIBRA’s development.
His connection to the episode had already affected his role at Meteora. Chow resigned from the project in February 2025 after questions emerged over Meteora’s relationship with LIBRA and Kelsier.
The court dismissed the conspiracy to defraud and unjust enrichment claims against Chow as well.
Kelsier RICO claims fail in court
Rochon separately dismissed the RICO claims against the Kelsier defendants after finding that the plaintiffs had not adequately pleaded a pattern of racketeering activity.
The plaintiffs sought to connect conduct surrounding M3M3 and LIBRA into a continuing enterprise. The court found that the alleged activity, spanning roughly six months, did not satisfy the continuity requirements needed for a RICO pattern.
Claims under RICO require more than allegations of related misconduct. Plaintiffs must establish a pattern that satisfies either closed ended continuity, involving criminal conduct over a substantial period, or open ended continuity, where the alleged conduct presents a continuing threat.
The court found neither had been sufficiently pleaded in the complaint.
Other claims against the Kelsier defendants were dismissed after Rochon concluded that the court lacked personal jurisdiction over them. The judge found the plaintiffs had not established jurisdiction through their proposed conspiracy theory and granted dismissal of the remaining state law claims on that basis.
The ruling closes the same U.S. case that previously resulted in tens of millions of dollars in stablecoins being temporarily frozen. In May 2025, Circle froze roughly $57 million in USDC linked to wallets at issue in the litigation.
A U.S. court later lifted the asset freeze after the defendants agreed not to move the disputed funds and plaintiffs withdrew their request for a preliminary injunction.
LIBRA investigations continue in Argentina
The dismissal resolves the class action in New York, but LIBRA has remained the subject of legal proceedings in Argentina.
Milei’s original post presented the project as a private initiative intended to support Argentine businesses and entrepreneurship. He deleted the post hours later and said he had not known the project’s details.
LIBRA’s launch drew scrutiny after wallets linked to insiders were accused of acquiring tokens early and pulling liquidity as the token’s price fell. Meteora’s liquidity infrastructure became part of the debate over how the launch had been structured, with onchain analysis of LIBRA tracing the use of Meteora pools during the token’s initial trading.
Argentine authorities have continued examining the movement of funds connected to the launch. In August 2026, a federal judge ordered 25 crypto wallets frozen and sought information including account holder identities, transaction records, IP addresses and know your customer data.
The order focused on wallets believed to have handled funds remaining with LIBRA’s creators after the February 2025 launch. Court documents cited in the Argentine proceedings identified eight wallets investigators described as belonging to the “Libra Team” and linked them to the token’s creation and subsequent movement of investor funds.
