Cryptocurrency trading platform implicated in alleged fraudulent practices, triggering potential class action litigation
Rewritten Article:
Published: April 22, 2025
** crypto exchange Meteora Takes a Dive Amidst USD 69 Million Digital Token Scam Allegations**
A pair of disgruntled investors have set their sights on crypto asset exchange Meteora, its former CEO Benjamin Chow, Kelsier Labs, and its co-founders Hayden Davis, Gideon Davis, and Charles Thomas Davis, levying accusations of a collusive scheme designed to artificially inflate the value of the $M3M3 token and swindle unwitting investors.
They've taken the fight to court, initiating class action lawsuits against the accused parties.
The lawsuit, filed with the US District Court for the Southern District of New York, contains six counts: fraud, unregistered offering and sale of securities, control person liability, negligent misrepresentation, and unjust enrichment. Hoppin Grinsell and Burwick Law, two prominent litigation firms, represent the investor duo.
MANIPULATING MAYHEM
Things began to unravel, according to the suit, when the defendants unveiled the M3M3 platform, marketed as a rebellious investment vehicle poised to stabilize price volatility and bolster the overall market capitalization. In parallel, they introduced the $M3M3 token, presented to investors as a Meteora initiative with hidden ties to the defendants.
With an aggressive marketing campaign, the group hyped the token as a unique, reliable memecoin investment, building credibility on Meteora's reputation and Benjamin Chow's influence. However, the suit alleges that insiders had colluded to amass 95% of the token supply within minutes of the launch, a shrewd move that inflated the token's post-launch market capitalization to $5 million.
Foreign investors, drawn in by the defendants' claims of intrinsic value and low-risk profile and persuaded by the appearance of a fair public launch, invested based on the artificially inflated market price and the post-launch price surge, which the defendants orchestrated.
BIG LOSSES, BIG SCAM
Capitalizing on surging investor interest, the defendants and insiders allegedly sold their tokens to retail investors at premium prices, capitalizing on the market manipulation and causing significant losses for non-insider investors just two days after the launch.
The defendants attempted to rebuild investor confidence and boost the token's trading activity, but these efforts led to brief market price increases followed by steep declines and substantial investor losses. The plaintiffs argue that these downward spirals could have been avoided had the defendants complied with federal securities registration and disclosure requirements.
In total, investors are said to have lost $69 million due to the alleged scam.
The lawsuit seeks compensatory and punitive damages, including the restoration of the ill-gotten gains, among other relief.
mobilize your resources for information:
- Cryptocurrency News Websites: Reports on the ongoing class action lawsuit can be found on platforms such as Cointelegraph, Crypto News, and The Shib Daily.[1][2][3]
- Legal Documents & Court Records: Obtain court records and legal documents related to the case on the official US District Court for the Southern District of New York's website or through legal document databases like PACER.[2][3]
- Follow Involved Law Firms: Burwick Law, representing the plaintiffs, may provide updates or press releases regarding the lawsuit. Stay up-to-date by following their website or social media.[2][4]
- Cryptocurrency & Blockchain Forums: Online communities like Reddit or Discord often discuss ongoing lawsuits and share information about Meteora and related projects.[5]
- Regulatory News: Agencies like the SEC may provide guidance or take action related to the classification of stake-based meme tokens as securities, a critical issue in this lawsuit.[2]
- The class action lawsuits against Meteora, Benjamin Chow, Kelsier Labs, and its co-founders allege a collusive scheme to artificially inflate the value of the $M3M3 token and swindle unwitting investors, with the defendants working together to amass 95% of the token supply.
- Hoppin Grinsell and Burwick Law, representing the disgruntled investors, have filed six counts against the accused parties with the US District Court for the Southern District of New York, including fraud, unregistered offering and sale of securities, negligent misrepresentation, and unjust enrichment.
- The investors claim that, due to the defendants' manipulation of the $M3M3 token market and negligent actions, they incurred big losses totaling $69 million, as non-insider investors bought tokens at premium prices based on the inflated market price and post-launch price surge orchestrated by the defendants.
- In the ongoing litigation, the plaintiffs seek compensatory and punitive damages and the restoration of the ill-gotten gains, urging the court to hold the defendants accountable for their securities manipulation and negligent role in technology-related business and finance investing.
