US judge dismisses LIBRA class action, 44,000 investors stranded

On September 29, Judge Jennifer L. Rochon dismissed the entire LIBRA class action with prejudice, definitively closing the US case and leaving over 44,000 investors without federal recourse despite serious allegations of liquidity extraction and orchestrated fraud.

A memecoin born from a presidential tweet

The LIBRA memecoin launched on February 14, 2025 on Solana, just minutes before Argentine President Javier Milei posted an endorsement on X that included the contract address. The tweet was deleted at 10:38 PM the same day, after one billion tokens had been minted in a single minute. The scheme had been preceded by the M3M3 memecoin airdrop on December 4, 2024, whose recipients sold heavily between December 5 and 6.

According to the complaint, wallets linked to the defendants repurchased tokens while the launch pool was frozen, then resold them to the public during very short windows: December 5-6, 2024 for M3M3, and February 14-16, 2025 for LIBRA. Hayden Davis said in a video on February 15, 2025: “I managed to gather every dollar collected, whether from fees, farming or liquidation, and I plan to reinject everything into the LIBRA chart within 24 to 48 hours.”

RICO rejected: six months is not enough

Plaintiffs had advanced two RICO claims to establish a “pattern” of continuous criminal activity. Judge Rochon dismissed both. On closed continuity, she cited Second Circuit precedent: no decision has ever upheld a period shorter than two years. The alleged conduct spanned October 2024 to March 2025, roughly six months.

“Six months is insufficient to demonstrate a ‘substantial period of time'”

Judge Jennifer L. Rochon, SDNY

On open continuity, the court found plaintiffs had not shown that the alleged wire fraud activities posed a threat of repetition, as the enterprise’s primary business was legitimate. Without a viable RICO claim, the RICO conspiracy count fell automatically. Once this federal pillar was removed, the basis for federal jurisdiction collapsed with it.

Fraud claims against Chow and Meteora’s legal status

The fraud claims against former Meteora CEO Benjamin Chow were dismissed for insufficient scienter. Plaintiffs had pointed to a statement made at a planning meeting: “Nobody will play if they see 90% of the supply already locked.” The court ruled that a profit motive alone does not establish the required fraudulent intent, and that participation in transaction fees is similarly insufficient.

“A profit motive does not provide the required inference of fraudulent intent”

Judge Jennifer L. Rochon, SDNY

As for Meteora, the court classified the platform as software rather than an unincorporated association or joint venture. The complaint failed to name a president or treasurer, and did not detail how members had consented to associate. The judge noted that the ability to update Meteora’s code via a majority of authorized wallet holders is not “analogous to a seven-member board of directors,” quoting a New York court: “Calling an organization a joint venture does not make it one.” All claims against Meteora were dismissed without reaching the merits.

Personal jurisdiction and the denied amendment

Once RICO fell, neither RICO’s service provision (18 U.S.C. § 1965) nor Rule 4(k)(2) could apply absent a valid federal claim. New York’s long-arm statute also could not reach Kelsier Ventures, Hayden Davis, Gideon Davis, or Charles Thomas Davis. All state claims were therefore dismissed for lack of personal jurisdiction.

In October 2025, plaintiffs sought to file a second amended complaint adding the MELANIA, ENRON, and TRUST tokens, a third plaintiff, Dynamic Labs Limited as a defendant, and 20 Doe defendants. The court deemed the amendments futile: the alleged activity window would have stretched to seven months, still insufficient for closed continuity. The new allegations against Chow and Dynamic Labs failed for the same reasons. The amendment was denied and the case permanently closed.

Market impact and parallel proceedings

Over 44,000 investors suffered losses, with no aggregate amount cited in the complaint. President Milei rejected any responsibility: “They knew very well the risk they were taking. If you go to the casino and lose money, that’s your problem.”

In a separate proceeding, Burwick Law had obtained a conservatory measure in May 2025 freezing approximately $110 million in LIBRA proceeds and 57,654,371 USDC. Circle had blocked the relevant stablecoins, but the freeze was lifted in August 2025. In Argentina, federal judge Marcelo Martínez de Giorgi ordered the identification and freezing of 25 LIBRA-linked wallets on Binance, Bybit, OKX, and Bitfinex in July. Those criminal investigations continue independently of the New York ruling.

Conclusion: a US case closed, open questions remain

Judge Rochon’s ruling does not constitute a factual finding on the merits. She stated this herself: “The order does not prove that insider activity, pre-launch funding, or fund extraction did not occur, nor that any fraud was committed.” The dismissal is strictly procedural: failure of temporal continuity for RICO, absence of scienter, Meteora’s status as software, and lack of personal jurisdiction.

For the 44,000 harmed investors, the US federal route is now closed. Potential remedies are limited to Argentina, other jurisdictions where assets may have transited, or uncoordinated individual actions. The case illustrates the difficulty of litigating multi-chain, multi-jurisdiction crypto schemes under RICO, a statute originally designed for traditional organized crime.

Sources

• CryptoSlate
• Texas Law Book
• Bloomingbit
• Etherworld
• Bitcoin News
• The Defiant

This article is published for informational and educational purposes only. It does not constitute investment advice. Do your own research (DYOR) before making any decision.