US judge dismisses LIBRA and M3M3 investor lawsuit with prejudice

US Judge Jennifer L. Rochon dismissed the amended complaint in the proposed class action over LIBRA and M3M3 with prejudice in a Sept. 29 opinion. Rochon denied permission to amend the complaint again and ordered the Southern District of New York case closed. Investors consequently lost a district-court route to recovering their losses through this action.

The plaintiffs alleged that insiders controlled token launches and extracted funds from liquidity pools at outside investors' expense. According to the complaint as recounted by the court, LIBRA launched on Feb. 14, 2025. The complaint said Argentina's President Javier Milei promoted LIBRA before withdrawing support that day. The dismissal resolved the legal sufficiency of the claims and the court's jurisdiction.

The central federal claim relied on the Racketeer Influenced and Corrupt Organizations Act, or RICO. RICO requires a pattern of related racketeering acts that spans a substantial period or threatens continuing criminal activity. The court found neither form of continuity adequately pleaded against the Kelsier defendants, including Kelsier Ventures and Hayden Davis. The court also found neither form adequately pleaded against Benjamin Chow, Meteora's co-founder and former CEO.

The court treated the alleged conduct from October 2024 through the March 2025 complaint as a six-month period. The court found that multiple schemes and a potentially large group of victims did not overcome that short duration. The opinion applied Second Circuit precedent generally requiring a longer period, while recognizing that two years is not a fixed cutoff.

The alternative continuity requirement demanded facts supporting a continuing threat. The court found that broad assertions about a repeatable token-launch business and referrals to other projects did not establish a continuing threat. Those assertions did not establish, defendant by defendant, that alleged wire fraud was a regular business practice. The dependent RICO conspiracy claims also failed.

The proposed amendment would have added MELANIA, ENRON and TRUST, another plaintiff and new defendants. The judge found that the amendment extended the alleged racketeering period to only seven months. The judge also found that the amendment provided no facts curing the continuing-threat defect.

After the RICO claims failed, the court dismissed the remaining state-law claims against the Kelsier defendants for lack of personal jurisdiction. The court found that allegations about nationwide social media and crypto infrastructure did not establish the necessary New York connections. The court did not reach the merits of those state-law claims.

The court dismissed all claims against Chow for pleading defects, including insufficient allegations of fraudulent intent. Claims against Meteora failed because investors had not adequately pleaded Meteora as a legal association or partnership capable of being sued. Hayden Davis denied wrongdoing in June 2025.

The order does not establish that every alleged act was lawful. The order also does not determine the status of every other possible recovery route.