Solana-based decentralized exchange Meteora is currently embroiled in a class-action lawsuit due to allegations surrounding the launch of the meme coin, M3M3, which is being described as a pump-and-dump scheme. The lawsuit, which involves losses estimated at $69 million between December 2024 and February 2025, has caught the attention of investors and the crypto community alike.
**Accusations of Manipulative Launch**
Filed on April 21 at the U.S. District Court for the Southern District of New York, the lawsuit accuses Meteora and its founder, Benjamin Chow, along with venture firm Kelsier Labs and its executives, of deceiving investors. The claim suggests that the defendants manipulated the price of the Solana-based token for their gain, detrimentally affecting the general public.
The filing details how the defendants allegedly managed the M3M3 launch to favor a select group of insiders, who reportedly purchased up to 95% of the token supply shortly after release, thereby limiting access to public buyers. This action is said to have artificially inflated the token’s price, which plummeted soon after these insiders sold their shares.
**Debating the Nature of Stake-Based Coins**
In response to the controversy, a blog post published in December 2024 by Meteora positioned M3M3 as a solution to the prevalent pump-and-dump schemes in the meme coin market, promoting it as a secure asset backed by staking. Despite promises of transparency and public accessibility, the lawsuit alleges these claims were misleading.
The complaint also urges for stake-based meme coins like M3M3 to be classified as securities to ensure better regulatory oversight, a move that could significantly impact how future tokens are launched on the Solana blockchain.
Adding to Meteora’s woes, a separate lawsuit filed in March targets the collapse of the LIBRA token, with accusations of insider trading schemes causing significant losses to traders. Following these controversies, Benjamin Chow has stepped down from his role at Meteora amid the growing scrutiny.
As the legal battles unfold, the crypto community watches closely, awaiting the outcomes and the implications they may have on the future of meme coins and token regulation.
**Tweet:** The drama unfolds as #Solana’s Meteora faces lawsuit over alleged M3M3 meme coin scam, questioning the integrity of launch practices & calling for stricter regulations on stake-based coins. #CryptoNews #MemeCoinScandal
