Meteora Crypto Exchange Hit with Class Action Suit over $M3M3 Token Fraud

Crypto exchange Meteora faces a class action lawsuit over a USD 69 million fraud scheme related to the $M3M3 token. Investors accuse Meteora and its former CEO, Benjamin Chow, along with Kelsier Labs, of manipulating the token launch and misleading investors. The lawsuit alleges multiple violations of securities laws and seeks restitution for affected investors.

Meteora, a crypto exchange, faces legal action involving accusations of a USD 69 million fraud scheme connected to the $M3M3 token. Two investors have launched class action proceedings against Meteora, its former CEO Benjamin Chow, and Texas family venture capital firm Kelsier Labs for allegedly manipulating the token’s launch and pricing to deceive investors. This lawsuit cites multiple defendants, including Kelsier co-founders Hayden, Gideon, and Charles Thomas Davis, claiming they colluded with Meteora to commit fraud.

The lawsuit, filed in the Southern District of New York, outlines six allegations, including fraud and unregistered securities offering, in violation of pertinent laws such as the Securities Act of 1933 and the Exchange Act of 1934. Represented by Hoppin Grinsell and Burwick Law, the investors Jonathan Clarke and Rodrigo Ferreira Da Cruz Vogt assert their claims based on negligence and unjust enrichment.

According to the investors, in December 2024, the defendants introduced the investment platform M3M3, claiming it would stabilise prices and protect investors while concealing their true collaborative intentions. They promoted the $M3M3 token as a reliable memecoin investment, using Meteora’s reputation to establish credibility. However, upon launch, insiders allegedly acquired 95% of the tokens in minutes, misleading non-insider investors about the token’s true market value.

The defendants purportedly sold tokens at artificially inflated prices shortly after launch, leading to substantial losses for unsuspecting investors. Following this, from December 2024 to February 2025, they attempted to regain investor confidence, resulting in temporary price increases followed by steep declines. The claimants argue that if the defendants had adhered to federal securities regulations, investors would not have incurred these losses.

The lawsuit aims to secure compensatory and punitive damages, including restitution of the USD 69 million allegedly obtained through wrongful actions by the defendants.