A US federal judge has permanently dismissed a class-action lawsuit filed by investors seeking to recover losses from LIBRA and M3M3, two memecoins linked to Argentine President Javier Milei. In a Sept. 29 ruling, Judge Jennifer L. Rochon of the U.S. District Court for the Southern District of New York dismissed the amended complaint with prejudice, denied leave to amend, and ordered the case closed.
Key Takeaways
- Case Dismissed with Prejudice: Judge Jennifer L. Rochon permanently closed the lawsuit and denied plaintiffs further opportunities to amend.
- RICO Claims Unravel: The court found that an alleged six-to-seven-month conduct timeline failed to meet federal continuity requirements under Second Circuit precedent.
- Scope Expansion Denied: The ruling blocked attempts to add MELANIA, ENRON, and TRUST tokens to the litigation.
- Jurisdictional Deficiencies: State-law claims against key defendants were thrown out due to lack of personal jurisdiction in New York.
Federal RICO Claims Fail Over Short Timeline
The class-action lawsuit alleged that insiders tightly controlled token launches and drained liquidity pools at the expense of outside investors. According to court filings, LIBRA launched on Feb. 14, 2025, with Milei promoting the token before withdrawing his support that same day.
The central federal claim relied on the Racketeer Influenced and Corrupt Organizations Act (RICO). However, Judge Rochon concluded that the alleged misconduct—spanning from October 2024 to the March 2025 complaint—covered only a six-month window. The court determined this duration was too brief to establish closed-ended continuity under Second Circuit precedent. A proposed amendment extending the period to seven months by adding the MELANIA, ENRON, and TRUST tokens similarly failed to demonstrate an ongoing criminal threat.
Lack of Jurisdiction and Pleading Defects End Suit
The court's decision clears several named defendants, including Kelsier Ventures, Hayden Davis, and Benjamin Chow, co-founder and former CEO of Meteora. Davis had previously denied wrongdoing and raised jurisdictional objections in June 2025. Following the failure of the federal RICO claims, Judge Rochon dismissed the remaining state-law claims against the Kelsier defendants for lack of personal jurisdiction, stating that broad references to nationwide social media and crypto infrastructure failed to establish required links to New York.
Claims against Chow were dismissed due to pleading defects, including insufficient allegations of fraudulent intent. The court also dismissed claims against Meteora, ruling that investors failed to plead it as a legal association or partnership capable of being sued. The dismissal occurs against a backdrop of increasing US crypto regulatory and enforcement actions.
Why It Matters
This ruling highlights the high legal bar investors face when attempting to apply civil RICO statutes to short-duration crypto and memecoin collapses. Federal courts require proof of a sustained, ongoing criminal enterprise rather than compressed multi-month scheme timelines. For retail traders who suffered losses from high-profile token promotions, the outcome underscores how difficult obtaining financial restitution remains when legal claims lack firm jurisdictional ties.
