Investors Sue Meteora, Kelsier Labs Over $69M M3M3 Token Losses

A group of investors has initiated a class-action lawsuit against Meteora, a decentralized cryptocurrency exchange, and venture capital firm Kelsier Labs. The lawsuit, filed on April 21 in the US District Court for the Southern District of New York, alleges that the defendants were involved in manipulating the launch and market price of the M3M3 token. The plaintiffs claim that they incurred at least $69 million in losses between December 2024 and February 2025 due to the defendants' actions.

The investors allege that the defendants intentionally misrepresented information during the M3M3 token launch in December 2024. They claim that the defendants presented the launch as being backed by trusted leaders in the Solana ecosystem, rather than disclosing that the launch was a fraudulent scheme designed to manipulate the market price. The complaint states that the defendants' actions artificially inflated the token's valuation, misleading non-insider investors into believing that the launch was transparent and fair. This misrepresentation led investors to rely on the market price as an accurate measure of the token's value, further exacerbating their losses.

The lawsuit is part of a broader trend of legal actions against various crypto firms accused of fraud through violations of US securities laws. Despite the US Securities and Exchange Commission (SEC) scaling back or dismissing many enforcement actions involving digital assets under the leadership of acting chair Mark Uyeda, the agency has indicated its intention to pursue cases against fraudulent token projects. The investors in the M3M3 case allege that the defendants designed the token and planned its launch with the sole purpose of enriching themselves at the expense of unsuspecting investors.

Meteora has been involved in the launch of several high-profile yet controversial tokens, including those for former US President Donald Trump, his wife Melania, Libra, and online influencer Haliey Welch. The lawsuit claims that Meteora attempted to distinguish the M3M3 token from other memecoins by highlighting its legitimacy and trustworthiness through the involvement of Meteora co-founder Ben Chow and the platform. However, the defendants allegedly failed to disclose the true nature of the token launch, leading to significant financial losses for investors.

The lawsuit against Meteora, Kelsier Labs, and the current and former executives involved in the M3M3 token launch is one of several legal actions targeting the firm. In March, a similar class-action lawsuit was filed in New York against Kelsier Ventures, KIP Protocol, and Meteora over the alleged deceptive and manipulative launch of the LIBRA token. The LIBRA token was briefly promoted by Argentine President Javier Milei over social media after his sister reportedly received payments from the project. The ongoing legal actions highlight the need for greater transparency and accountability in the cryptocurrency industry to protect investors from fraudulent activities.