Meteora co-founded 15 types of Token scams! Insiders manipulated prices to profit 100 million dollars.

Benjamin Chow, co-founder of the Meteora DEX on Solana, has been accused of being the mastermind behind a scheme to defraud investors through 15 different tokens. He and Kelsier Venture Capital used the names of celebrities such as First Lady Melania Trump and Argentine President Javier Milei to make the fraud appear credible. Reports from blockchain analytics firm Bubblemaps indicate that insiders profited over 100 million dollars from this.

Lawsuit escalation expanded from M3M3 to 15 types of Tokens

(Source: CourtListener)

The original indictment accuses Chow, Meteora, and members of the Davis family of lying to cryptocurrency investors. The indictment claims that they profited at the expense of the public interest by manipulating the price of the Solana-based token M3M3, of which up to 95% of the supply was controlled by a group of insiders. This extreme supply concentration allowed insiders to easily manipulate the price, leaving ordinary investors with no chance.

The modified document claims that up to 15 cryptocurrencies may be involved in fraudulent activities, including the controversial MELANIA and LIBRA meme coins, which are promoted by First Lady Trump and President Milei, respectively. It is alleged that this information comes from private messages shared by a whistleblower, in which Davis admitted to “conducting at least 15 token issuances at Chow's direction.” This testimony directly links the co-founder of Meteora to a large-scale fraud scheme.

The plaintiffs claim that Mr. Chow and the other defendants “borrowed the credibility of public figures” and used them as “props” to make their scheme appear more legitimate. As a result, they did not hold Melania or Miley accountable; instead, their targets were Meteora, its co-founders, and the management of Kelsier. This strategy suggests that the plaintiffs believe the celebrities themselves might be innocent, and the real fraudsters are the technical team and operators behind the scenes.

The new indictment states that the conspiracy was carried out in a highly organized manner, with each participant having a clear role. Mr. Chow is alleged to be responsible for the technical aspects, as he “has a unique understanding of the code and is able to manipulate liquidity, fee routing, and supply control.” Therefore, the complainants believe that he was able to control the supply and price of the new token, leading to the token's value being artificially inflated without the knowledge of ordinary traders, and then crashing.

15 Operational Models of Involved Tokens:

Supply Concentration: Insiders control 95% of the supply, while retail investors only account for 5%.

Celebrity Endorsement: Utilizing public figures such as Mrs. Trump and President Milei to create credibility.

Technical Manipulation: Controlling liquidity and prices through Meteora DEX code.

Social Hype: Paid influencers and social media activities create an illusion of popularity

Pump and Dump: After artificially inflating the price, insiders concentrate on selling off.

In marketing, the lawsuit points to Kelsier Ventures, where Hayden, Charles, and Gideon Davis used paid influencers and social media campaigns to make the demand for meme coins like MELANIA and LIBRA appear to be real. According to reports, the group employed the same tactics for all 15 tokens: they artificially created scarcity, heavily promoted paid marketing online, and then, when prices rose, insiders would sell off all their held tokens at once, leading to a drop in asset value and causing substantial losses for other investors.

Performance cutting and denial strategies face evidence

According to the lawsuit, after the collapse of the LIBRA Token in February 2025, Meteora pretended to blacklist Kelsier, with the plaintiff claiming this act was “performative.” It is alleged that Chow and members of Meteora's leadership swore statements claiming to be “passive developers of autonomous software,” implying that they were not involved in the price behavior of the involved crypto assets. This defense strategy attempts to shift the responsibility to the decentralized protocol itself, claiming that developers merely provide tools and cannot control how users utilize them.

The programmer left Meteora in February and still insists on his innocence. However, the data from the blockchain analysis company tells a completely different story. The transparency of the blockchain allows all transaction records to be tracked and analyzed, which becomes a key tool for exposing fraud. Although fraudsters can use multiple wallet addresses to conceal their identity, the association analysis of fund flows will ultimately reveal the truth.

Data from blockchain analysis companies like Bubblemaps has become key evidence in this case. Their report on February 17, 2025, tracked several wallet addresses that clearly showed financial connections between the developers of MELANIA and LIBRA, while revealing that insiders profited over 100 million dollars from it. This on-chain evidence is extremely difficult to refute, as all transactions are recorded on a public blockchain that anyone can verify.

The profit scale of 100 million dollars indicates that this is a well-planned large-scale scam. If insiders control 95% of the Token supply, when they sell off at the price peak, the funds of retail investors are effectively transferred directly into the pockets of insiders. This “zero-sum game” makes it almost impossible for ordinary investors to profit, and the entire scheme is designed to extract wealth from retail investors.

Chow's technical abilities allow him to execute such complex manipulations. As a co-founder of Meteora DEX, he has an in-depth understanding of smart contract code and can embed backdoors or special mechanisms at the time of token issuance, such as hidden minting features, switches to pause trading, or asymmetric fee structures. These technical means give insiders advantages in trading that ordinary users cannot obtain.

Solana Ecosystem Trust Crisis and Regulatory Warning

This case has caused significant damage to the reputation of the Solana ecosystem. Meteora is one of the more well-known DEXs on Solana, and the involvement of its co-founder in such a large-scale fraud has triggered a trust crisis for investors in other projects on Solana. Many people have begun to question how many similar fraudulent projects are lurking in the Solana ecosystem.

Solana's high performance and low transaction fees make it a popular platform for meme coins and rapid token issuance. However, this ease of use has also been exploited by scammers. Compared to Ethereum, the cost of issuing tokens on Solana is extremely low, attracting a large number of speculative projects. Some of these projects are legitimate innovative attempts, but there are also many that are purely pump and dump scams. The Meteora case highlights the seriousness of this issue.

From a regulatory perspective, this case may prompt the SEC and other regulatory agencies to strengthen their oversight of decentralized exchanges and token issuance. Although the decentralized nature of DeFi makes it difficult to regulate, regulatory agencies cannot turn a blind eye when the scale of fraud reaches the level of 100 million dollars. In the future, we may see stricter token issuance reviews, developer identity verification requirements, and compliance obligations for DEX.

For investors, this case provides important lessons. First, be wary of tokens with highly concentrated supply. If more than 70% of the supply is controlled by a few addresses, this is itself a danger signal. Second, celebrity endorsements do not equate to project reliability. Although MELANIA and LIBRA are associated with well-known figures, these individuals may know nothing about the actual operation of the project. Third, use blockchain analysis tools for due diligence. Tools like Bubblemaps and Nansen can reveal the real supply distribution and flow of funds for tokens.

For the Meteora platform itself, this case could be devastating. Even if Chow is ultimately proven innocent, the platform's reputation has already been severely damaged. Users may choose other Solana DEXs, such as Raydium or Orca, to avoid any association with the implicated platform. Furthermore, if the court rules that Meteora must bear joint liability, the platform could face massive compensation claims, or even bankruptcy.

From a technical perspective, this case has also sparked discussions about the code auditing and transparency of DEX. If there are backdoors or privileged features in the DEX code that can be exploited by developers, then “Decentralization” is merely superficial. True decentralization requires not only open-source code but also ensuring that no single entity can manipulate the operation of the protocol. Future DEX may need to undergo third-party security audits and explicitly prohibit any privileged features in smart contracts.

The outcome of the lawsuit will have a profound impact on the entire DeFi industry. If the court rules that developers are responsible for fraud occurring on their platform, it will redefine the boundaries of responsibility in DeFi. This may prompt more projects to adopt KYC measures, increasing compliance costs, but it will also enhance user protection. Conversely, if the court finds that developers, as “passive tool providers,” bear no responsibility, it may leave greater room for future fraud.

For investors focused on Meteora, it is recommended to closely monitor the progress of the lawsuit, avoid participating in new tokens with highly concentrated supply, prioritize projects that have been audited and have long-term operational verification, and use blockchain analysis tools for due diligence before investing. This case once again proves that in the cryptocurrency space, “trust but verify” is the iron law of survival.