A U.S. judge has thrown out a proposed class action brought by investors seeking to recover losses tied to LIBRA—the memecoin promoted by Argentine President Javier Milei—and another token called M3M3, effectively shutting down their district-court avenue for restitution.
District Judge Jennifer L. Rochon issued an opinion on Sept. 29 dismissing the amended complaint with prejudice, denying any further amendments, and directing the clerk to close the case in the Southern District of New York. The ruling also halted the plaintiffs’ bid to expand the litigation to include three additional tokens.
The lawsuit claimed that insiders manipulated token launches, draining funds from liquidity pools at the expense of external investors.
As outlined in the court’s summary of the complaint, LIBRA debuted on Feb. 14, 2025, with endorsements from Milei, who backed away from the project later that same day. The dismissal addressed both the legal merits of the accusations and questions surrounding the court’s jurisdiction.
Why the racketeering claims in the LIBRA case failed
The primary federal claim was anchored in the Racketeer Influenced and Corrupt Organizations Act (RICO), which mandates demonstrating a pattern of interconnected racketeering activities lasting for a substantial timeframe or posing a threat of ongoing criminal conduct.
The court concluded that the plaintiffs failed to adequately establish either type of continuity regarding the Kelsier defendants—which include Kelsier Ventures and Hayden Davis—as well as Benjamin Chow, the co-founder and former CEO of Meteora.
Addressing the first path to continuity, the court evaluated the alleged timeline running from October 2024 through the filing of the complaint in March 2025, treating it as a span of roughly six months. The presence of multiple schemes and a potentially broad pool of victims was not enough to offset such a brief duration.
The ruling cited Second Circuit case law that typically requires a longer duration to establish this variety of continuity, though it acknowledged that a two-year threshold is not an absolute rule.
The second path required factual backing for a continuing threat. The court determined that generalized claims regarding a repeatable token-launch business model and references to other ventures fell short of showing, on a defendant-by-defendant basis, that wire fraud constituted a regular way of conducting business. Consequently, the dependent RICO conspiracy claims were also dismissed.
Had the proposed amendments been accepted, they would have introduced MELANIA, ENRON, and TRUST to the suit, along with an additional plaintiff and new defendants. However, the judge noted this would only extend the alleged racketeering timeframe to seven months while failing to supply facts that fixed the continuing-threat deficiency.
With the RICO counts dismissed, the court dropped the remaining state-law claims against the Kelsier defendants due to a lack of personal jurisdiction. Arguments pointing to nationwide social media and cryptocurrency infrastructure fell short of proving the requisite ties to New York, meaning the court did not evaluate the substance of those state-law claims.
All allegations against Chow were thrown out due to pleading flaws, such as a lack of sufficient evidence regarding fraudulent intent. Claims targeting Meteora were likewise dismissed because the investors failed to properly frame it as a legal association or partnership that could be sued.
Although Hayden Davis had previously contested jurisdiction and denied any wrongdoing in June 2025, this latest decision solidifies a major defeat for investors attempting to recoup their money through this litigation.
The ruling does not declare that every disputed action was legal, nor does it rule out other potential avenues for recovery.