A Legal Dead End for LIBRA Memecoin Investors

Investors in the LIBRA and M3M3 memecoins, notably promoted by Argentine President Javier Milei, have faced a definitive legal setback in their quest for restitution. Judge Jennifer L. Rochon of the Southern District of New York dismissed a proposed class-action lawsuit with prejudice, effectively closing the door on claims that insiders manipulated token launches to defraud outside participants. The ruling not only ends the current litigation but also blocks any future attempts to amend the complaint or expand it to include other controversial tokens.

The Failure of RICO and Continuity Claims

The core of the plaintiffs' legal strategy rested on the Racketeer Influenced and Corrupt Organizations Act (RICO), alleging a pattern of criminal activity involving Kelsier Ventures and Meteora co-founder Benjamin Chow. The court ruled that the alleged misconduct—spanning only six to seven months—failed to meet the "continuity" requirements necessary for a federal racketeering charge. Under Second Circuit precedent, such a short duration is typically insufficient to establish a long-term pattern of criminal behavior, and the court found no evidence that the alleged wire fraud constituted a permanent business practice for the defendants.

Jurisdictional Hurdles and Dismissed Allegations

Beyond the failure of the federal RICO claims, the court rejected the investors' attempts to expand the lawsuit to include other tokens such as MELANIA, ENRON, and TRUST. State-law claims were dismissed due to a lack of personal jurisdiction, as the court found that general social media presence and crypto infrastructure did not establish a sufficient connection to New York. Furthermore, claims against individual defendants were tossed for pleading defects, including a failure to prove fraudulent intent, leaving the investors with no remaining path for recovery within this specific judicial action.