Solana’s Meteora Hit With Lawsuit Over Alleged Meme Coin Scam

Solana-based decentralized exchange Meteora is facing a class-action lawsuit over pump-and-dump claims surrounding the M3M3 meme coin launch.

The complaint alleges this led to losses of at least $69 million between December 2024 and February 2025.

Rug Pull Allegations

In the April 21 filing with the U.S. District Court for the Southern District of New York, the plaintiffs accused Meteora and its founder, Benjamin Chow, of misleading investors. It also named venture firm Kelsier Labs and several of its executives, including Chairman Thomas Davis and his sons Hayden and Gideon, in claims of manipulating the price of the Solana-based token to profit at the expense of the public.

“Together, defendants covertly orchestrated the purportedly public launch of M3M3 on Meteora to limit initial sales to defendants and a tightly-controlled group of insiders,” lawyers for the petitioners wrote.

According to the complaint, insiders behind the M3M3 project quietly acquired as much as 95% of the token supply within 20 minutes of launch using over 150 wallets. During this period, access to public buyers was allegedly restricted, which allowed them to inflate the token’s price through internal trades artificially.

Once the value spiked, they sold their holdings, leading to a sharp market crash just days after the rollout. The accusers argue that the defendants then made calculated efforts to reinflate the token’s price in an attempt to restore investor trust, but this failed to bring long-term stability.

The suit also claims the alleged offenders concealed their identities and affiliations throughout the process, misleading the public into believing the coin was launched fairly.

Stake-Based Coins Should be Securities

A blog post published in December 2024 introduced Meteora’s platform as a direct response to the “pump-and-dump” issues affecting meme coin markets. At the time, Chow is said to have promoted M3M3 as a secure, stake-backed asset designed to offer long-term value.

Investors were also reportedly assured that the launch would be fully transparent and accessible to the public, with staking rewards generated from transaction fees on the Meteora platform.

However, the April suit claims that these statements were intentionally deceptive. The filing further seeks regulatory clarity by calling for stake-based meme coins like M3M3 to be officially categorized as securities. Burwick Law notes that such classification could influence how any new celebrity or political token is brought to market on Solana.

Meanwhile, Kelsier Ventures, KIP Protocol, and Meteora are also facing a separate class-action case lodged in March over the collapse of the LIBRA token. During that incident, insiders were accused of exploiting private liquidity mechanisms to sell at peak prices, leaving ordinary traders exposed to losses.

Chow has since resigned from his leadership position in Meteora amid suspicions of insider trading and financial misconduct linked to the LIBRA fallout.