A federal judge in New York dismissed the LIBRA and M3M3 investor class action with prejudice. The ruling turned on defects in the legal theories, not on whether the alleged liquidity extract
The LIBRA lawsuit that investors brought against Hayden Davis, Kelsier Ventures, Meteora and former Meteora chief executive Benjamin Chow ended on September 29, 2026, when U.S. District Judge Jennifer L. Rochon of the Southern District of New York dismissed the amended complaint with prejudice, meaning the claims cannot be refiled in that court, and ordered the case closed. Her 81-page opinion in Hurlock v. Kelsier Ventures also refused the plaintiffs permission to file a second amended complaint. The decision ends the main U.S. civil action over a token that briefly reached a market value of roughly $4 billion after Argentine President Javier Milei posted about it. It does so without any finding on whether insiders drained the liquidity pools as alleged.
Omar Hurlock and Anuj Mehta sued on behalf of a proposed class, naming Kelsier Labs, which trades as Kelsier Ventures, Hayden Davis, Gideon Davis, Charles Thomas Davis, Chow and Meteora itself. They pleaded fraud, conspiracy to defraud, civil RICO violations, breaches of New York consumer-protection law and unjust enrichment.
Rochon tested those claims against a single question: whether the complaint, taken as written, described conduct the law allows these plaintiffs to sue over in this court. She concluded it did not. Nothing in the opinion declares LIBRA or M3M3 a legitimate launch, and nothing in it rules out the insider activity the investors described. The blockchain transactions at the center of the complaint were never tested as evidence.
Civil RICO requires a “pattern of racketeering activity”, and courts in the Second Circuit read that as either related acts stretching over a substantial period or a continuing threat of criminal conduct. The plaintiffs dated the alleged enterprise from at least October 2024 to March 17, 2025. That is about six months. Six months is not sufficient to demonstrate a ‘substantial period of time,'” Rochon wrote
Rochon noted that the Second Circuit has never accepted a period shorter than two years as substantial, and she cited earlier decisions rejecting spans of six, seven and 16 months. She also described the alleged conduct as one scheme run by a small group with a common objective and wire fraud as the underlying act, so the number of transactions and potential victims could not offset the short duration.
The proposed second amended complaint tried to widen the frame by adding MELANIA, ENRON and TRUST to the alleged scheme, along with another plaintiff, further defendants and more documents. The judge called the amendment futile. Even the expanded timeline covered only about seven months.
The crypto-specific part of the opinion concerns Meteora. Dynamic Labs argued that Meteora is software, not an unincorporated association or partnership with a legal existence of its own. The plaintiffs answered that it had a chief executive, a team, governance processes and people who controlled the development and deployment of its programs, and they pointed to a 4-of-7 multisig, a shared wallet in which any four of seven keyholders can authorize program changes.
Rochon held that the complaint had not adequately pleaded an unincorporated association under New York or federal law. Control of software through a multisig, in her reading, is not the same as members jointly conducting an association’s business. Quoting a New York court, she added that “calling an organization a partnership does not make it one.” Litigants in other DeFi disputes face the same obstacle whenever a protocol is part code, part developers and part signers.
The fraud claims against Chow fell under the heightened standard of Federal Rule of Civil Procedure 9(b). The plaintiffs relied on his role in the M3M3 launch, planning documents and a calculation template covering staking, tokenomics and liquidity metrics, which they presented as the design of an extraction strategy. The court found the same material consistent with helping Kelsier use Meteora’s software. A financial motive alone did not establish fraudulent intent.
Jurisdiction disposed of the rest. Once the federal RICO claims failed, the plaintiffs needed a New York connection for the Kelsier defendants and offered U.S. validators, exchanges, investors and nationally distributed promotion. The judge ruled that nationwide infrastructure does not show activity purposefully directed at New York.
DISMISSED
Civil RICO
The alleged enterprise lasted about six months. No Second Circuit precedent accepts under two years.
NOT SUABLE AS PLEADED
Claims against Meteora
Not adequately pleaded as an unincorporated association. Multisig control was not enough.
RULE 9(b) NOT MET
Fraud against Benjamin Chow
The documents were consistent with legitimate technical assistance to Kelsier.
NO JURISDICTION
State-law claims against Kelsier
U.S. validators, exchanges and national promotion did not show conduct aimed at New York.
FUTILE
Second amended complaint
Adding MELANIA, ENRON and TRUST extended the timeline to only about seven months.
LIBRA was minted on February 14, 2025 with a supply of 1 billion tokens. According to the complaint as summarized in the ruling, 20% went to a treasury address, 50% to an “Argentina Growth” allocation and 30% to liquidity. Milei posted about the project roughly 23 minutes later. The price climbed to around $4.50 before the token lost about 95% of its value.
LIBRA IN NUMBERS
$4B
peak implied market value
-95%
decline from the peak
86%
of traders lost money (Nansen)
$251M
realized losses (Nansen)
$99M
withdrawn by eight linked wallets (Chainalysis)
Independent analytics firms measured the damage. Chainalysis told Reuters that eight wallets linked on-chain to LIBRA’s creator withdrew about $99 million from the liquidity pools, though it could not establish who controlled them. Nansen calculated that 86% of traders with gains or losses above $1,000 lost money, realizing about $251 million in losses against roughly $180 million made by profitable wallets.
The plaintiffs’ own figures remain allegations. They claimed one wallet took about 13.06 million USDC from the LIBRA/USDC pool in the first 107 minutes, and that intermediary wallets extracted a cumulative 44.59 million USDC between February 14 and February 16, with similar movements in the LIBRA/SOL pools.
M3M3 supplied the earlier half of the plaintiffs’ theory. The token launched on Meteora on December 4, 2024 as the first “stake-to-earn” memecoin, passed a fully diluted valuation of $150 million two days later and then fell more than 90%. Chow resigned from Meteora in February 2025, denied leaking information or handling LIBRA tokens, and acknowledged that he had asked Kelsier to launch M3M3 and later referred the firm to other projects, including MELANIA. He said Meteora had known for several weeks that LIBRA was a possibility but limited its role to technical support.
●DECEMBER 4, 2024
M3M3 launches on Meteora as the first stake-to-earn memecoin.
●FEBRUARY 14, 2025
LIBRA is minted, peaks near $4 billion and collapses by about 95%.
●FEBRUARY 2025
Benjamin Chow resigns from Meteora.
●MARCH-MAY 2025
Investors sue in New York state court on March 17. The case moves to federal court in May, where about $57.65 million in USDC is temporarily frozen.
●AUGUST 2025
The court denies a preliminary injunction and lifts the freeze.
●OCTOBER 2025
Plaintiffs seek to add MELANIA, ENRON and TRUST to the complaint.
●SEPTEMBER 29, 2026
The amended complaint is dismissed with prejudice and the case is closed.
The opinion narrows three routes that plaintiffs’ lawyers have used against token launches. RICO fits poorly with schemes that begin and end within weeks, because continuity is measured in years. Naming a protocol as a defendant now requires pleading who its members are and how they jointly run a business, which a multisig alone does not show. A federal forum in New York requires conduct aimed at that state, not transactions passing through U.S. infrastructure.
The money is already beyond reach. The $57.65 million in USDC tied to LIBRA proceeds was released in August 2025, when Rochon denied the preliminary injunction after expressing skepticism about the plaintiffs’ chances.
Chow’s lawyers at Cahill Gordon & Reindel described the outcome as a complete dismissal for their client. The plaintiffs can still appeal to the Second Circuit, and federal appellate rules give them 30 days from the entry of judgment to file a notice.
Davis’s remaining exposure lies in Argentina, where a criminal investigation led by prosecutor Eduardo Taiano continues. Argentine reporting in August said investigators had traced more than $5 million in digital-asset transfers that Davis made after a January 30, 2025 meeting with Milei, directed toward accounts connected to lobbyist Mauricio Novelli. Material recovered from Novelli’s phone references an alleged $5 million arrangement tied to LIBRA’s promotion. Neither item amounts to a finding of wrongdoing by Davis or Milei.
A June 2026 Federal Police cybercrime report could not identify who controlled the wallets that created and first funded the token. A month later, Judge Marcelo Martínez de Giorgi froze 25 wallets on Binance, Bybit, OKX, CoinEx, Bitfinex and FixedFloat at Taiano’s request and ordered the exchanges to identify their holders. In September the court was still handling forensic analysis and a dispute over whether investors may join the case as formal complainants.
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