A group of investors has filed a class-action lawsuit against decentralized cryptocurrency exchange Meteora

In an amended complaint filed on April 21 in the US District Court for the Southern District of New York, the plaintiffs allege that venture capital firm Kelsier Labs

A group of investors has filed a class-action lawsuit against decentralized cryptocurrency exchange Meteora for allegedly engaging in activities that manipulated the launch and market price of the M3M3 token.

In an amended complaint filed on April 21 in the US District Court for the Southern District of New York, the plaintiffs claimed that venture capital firm Kelsier Labs, Meteora, and four current or former executives “intentionally misrepresented” information in a bid to launch the token in December 2024.

The investors stated that they suffered at least $69 million in losses between December 2024 and February 2025 after the parties presented “trusted leaders in the Solana ecosystem” as being behind the token launch, rather than a “blatant fraud” in which sales were manipulated to artificially inflate the price.

“This artificially-inflated valuation communicated highly misleading information to non-insider investors, who reasonably relied on Defendants’ representations that the $M3M3 launch was fully accessible to the public and conducted in a transparent manner fair to non-insider investors, and thus reasonably relied on $M3M3 market price as a meaningful measure of its value,” the complaint stated. “The post-launch price spike also served to corroborate Defendants’ aggressively-marketed, but misleading, assertions that $M3M3 had intrinsic value and a comparatively low risk profile.”

The lawsuit is one of many involving different crypto firms that have alleged fraud through violations of US securities laws. Though the US Securities and Exchange Commission (SEC), under acting chair Mark Uyeda since US President Donald Trump took office, has scaled back or dismissed many enforcement actions involving digital assets, the agency said in February that it still intended to pursue cases against fraudulent token projects.

The investors added:

The parties allegedly used multiple burner wallets to purchase the M3M3 tokens in bulk at the start of the launch to quickly increase demand and drive up the price. They also sold the tokens at lower price tiers to create the impression of fair and competitive pricing, according to the lawsuit.

However, the parties allegedly engaged in "insider trading" at the higher price tiers, keeping the majority of the tokens for themselves and selling small batches to pump up the market price, which they later used to exit their positions at a profit.

The investors stated that they had no knowledge of the alleged scheme to defraud them and were induced to invest in the M3M3 tokens based on the defendants' false and misleading statements and omissions.

The defendants are also accused of making false and misleading statements about the token's value, risk profile, and liquidity to induce investors to buy the tokens at inflated prices.

The investors are seeking to recover their losses, as well as punitive damages from the defendants for their alleged fraudulent conduct.

The parties involved in the lawsuit could not immediately be reached for comment.

The lawsuit is unfolding amid heightened scrutiny of the memecoin market, particularly in the wake of the collapse of several major crypto firms in 2024.

Regulators around the world are increasingly turning their attention to the memecoin sector, which has seen a surge in popularity in recent years.

Memecoins in the Solana ecosystem

Meteora has been linked to the launch of several high-profile yet controversial tokens, including those for Trump (TRUMP), his wife Melania (MELANIA), Libra (LIBRA), and online influencer Haliey Welch (HAWK).

According to the lawsuit, the firm “purported to offer a comprehensive solution to the problems in the memecoin investment market” with the launch of M3M3. The defendants in the case allegedly attempted to distinguish the token from other notable memecoins by highlighting the “legitimacy and trustworthiness” through the involvement of Meteora co-founder Ben Chow and the platform.

Kelsier Ventures, KIP Protocol, and Meteora face a similar class-action lawsuit filed in New York in March over LIBRA allegedly being launched in a “deceptive, manipulative and fundamentally unfair” manner. Argentine President Javier Milei briefly promoted the token over social media after his sister reportedly received payments from the project.