- Meteora executives are accused of orchestrating a pump-and-dump that inflated $MELANIA to $13.73, then crashed it to about $0.10, costing investors millions.
- Suit alleges $MELANIA was one of 15 fraudulent tokens in a scheme netting roughly $57 million, using celebrity branding as “window dressing.”
- The class-action in Manhattan could shape crypto endorsement rules and increase regulatory scrutiny of celebrity-backed meme coins.
In a dramatic turn in the world of celebrity-backed cryptocurrencies, the architects behind Melania Trump’s $MELANIA meme coin have been accused of orchestrating a sophisticated pump-and-dump fraud.
The allegations surfaced in court filings on Tuesday in Manhattan federal court, where investors claim executives at the Meteora cryptocurrency exchange platform engineered a scheme that artificially inflated the coin’s value before letting it crash, pocketing millions in the process.
Launched on January 19, 2025—just a day before Donald Trump’s inauguration as U.S. President—the $MELANIA coin started trading at mere cents.
The FrankNez Media Daily Briefing newsletter provides all the news you need to start your day. Sign up here.
It quickly skyrocketed to a peak of $13.73 within hours, fueled by hype surrounding the First Lady’s name.
However, the value plummeted almost as rapidly, now hovering around 10 cents—representing less than 1% of its high.
Similarly, Donald Trump’s $TRUMP coin, released shortly before his inauguration, peaked at $45.47 but currently trades at about $5.79, according to market data from CoinMarketCap.
The lawsuit, which has been expanded to include these claims as part of ongoing proceedings that began in April, does not name Melania Trump herself.
Plaintiffs explicitly state they do not believe she is “culpable” in the matter, instead accusing the crypto firms of using her and other high-profile figures as “window dressing” to lend credibility to their fraudulent activities.
According to the court documents, Meteora executives, including co-founder Benjamin Chow and potentially others like Hayden Davis, allegedly set up mechanisms to indirectly acquire large quantities of $MELANIA coins at launch.
Their accomplices then dumped these holdings en masse, reaping substantial profits while ordinary investors were left holding devalued assets.
The suit describes $MELANIA as just one of at least 15 fraudulent tokens in an elaborate conspiracy that reportedly netted the perpetrators around $57 million in ill-gotten gains.
This isn’t isolated to the Trumps; the filing also references similar schemes involving other celebrities, such as Argentine President Javier Milei in a “LIBRA” coin scam.
Investors argue that the defendants “weaponized fame to disarm investors,” exploiting public trust in familiar names to drive up demand before pulling the rug out.
Meteora has not yet responded to requests for comment on the allegations, which paint a picture of calculated market manipulation in the volatile meme coin sector.
The Timeline of $MELANIA: From Hype to Crash
To understand the full scope of the alleged fraud, it’s essential to trace the $MELANIA coin’s tumultuous journey.
On January 19, 2025, the token debuted on the Meteora platform amid a frenzy of social media buzz and promotional posts tying it directly to Melania Trump’s public persona.
Within the first few hours of trading, speculative buying—allegedly amplified by insider purchases—propelled the price from $0.05 to its staggering $13.73 peak.
Eyewitness accounts from affected investors describe a chaotic scene on trading apps, with retail users piling in based on promises of “lifelong value” and “exclusive First Lady perks.”
But by the end of the day, coordinated sell-offs triggered a 99% collapse, wiping out over $200 million in market capitalization.
“I thought this was my ticket to financial freedom,” one anonymous plaintiff told reporters outside the courthouse.
“Instead, it was a trap set by professionals who knew exactly what they were doing.”
Legal experts note that pump-and-dump schemes like this are increasingly common in the unregulated meme coin space, where low barriers to entry allow bad actors to exploit hype-driven markets.
The Trump Family’s Explosive Crypto Empire
The controversy comes amid reports of the Trump family’s significant involvement in the cryptocurrency space.
A recent Financial Times investigation revealed that Donald Trump and his family have amassed over $1 billion in pre-tax profits from various crypto-related ventures in the past 12 months alone.
This includes earnings from tokens like $TRUMP and ties to companies such as World Liberty Financial, which has drawn scrutiny for its centralized control and potential for market influence.
Beyond $MELANIA and $TRUMP, the family’s portfolio encompasses NFT collections, DeFi platforms, and even a branded blockchain wallet app launched in the spring of 2025.
Sources close to the ventures estimate that promotional events featuring the Trumps have generated hundreds of millions in token sales, with a portion funneled back as fees and royalties.
“The Trumps have turned their brand into a crypto goldmine,” said blockchain analyst Sarah Kline in an interview.
“But this lawsuit shines a light on the shadowy underbelly of that success.”
Celebrity Crypto Scams: A Growing Epidemic
This case is part of a larger wave of lawsuits targeting celebrity-endorsed cryptocurrencies.
The $MELANIA allegations join proceedings against schemes involving actors, athletes, and politicians from across the globe.
In one parallel case, investors sued over a token tied to a Hollywood star that vanished overnight, costing users $30 million.
Regulators, including the U.S. Securities and Exchange Commission (SEC), have ramped up enforcement, issuing warnings about “high-risk meme coins” that prey on unsuspecting buyers.
Experts warn that without stricter disclosure rules, more scandals are inevitable.
“Celebrities provide the glamour, but platforms like Meteora provide the machinery for fraud,” said securities lawyer David Rosenthal.
The ongoing Manhattan suit seeks class-action status, potentially representing thousands of investors who lost fortunes on $MELANIA and related tokens.
What Happens Next? Implications for Crypto Regulation
As the class action lawsuit progresses, it could set precedents for how celebrity endorsements are regulated in the crypto world, potentially impacting future launches.
Key questions remain: Will Meteora executives face criminal charges? Could Melania Trump be called as a witness, even if not named as a defendant? And how might this affect the Trump family’s broader crypto ambitions ahead of the 2026 midterms?
For now, the $MELANIA saga serves as a cautionary tale in an industry still grappling with transparency and accountability.
Investors are urged to conduct thorough due diligence, while lawmakers in Washington debate new bills to curb meme coin manipulations.
As one plaintiff put it in court papers: “Fame should build trust, not destroy lives.”
The crypto community—and the Trumps—will be watching closely as this story unfolds.
Also Read: SEC Is Now Aiming at Making New Changes to CAT System
