Investors holding LIBRA, the memecoin promoted by Argentine President Javier Milei, have lost their avenue for recouping losses after a U.S. federal judge dismissed the proposed class action involving LIBRA and the companion token M3M3.
In a September 29 opinion, Judge Jennifer L. Rochon dismissed the amended complaint with prejudice, refused further leave to amend, and ordered the Southern District of New York matter closed. The ruling also rejected the plaintiffs’ proposal to widen the suit to include three additional tokens.
The suit alleged that insiders orchestrated token launches and siphoned funds from liquidity pools at the expense of outside investors.
According to the complaint as summarized by the court, LIBRA launched on February 14, 2025, with Milei promoting it before withdrawing his endorsement later that day. The dismissal resolved both the legal sufficiency of the claims and the court’s jurisdiction.
Why the RICO claims in the LIBRA lawsuit collapsed
The primary federal allegation hinged on the Racketeer Influenced and Corrupt Organizations Act (RICO), which mandates a pattern of related racketeering activity spanning a significant duration or posing a threat of ongoing criminal conduct.
The judge concluded that neither continuity standard was adequately pleaded against the Kelsier defendants, comprising Kelsier Ventures and Hayden Davis, as well as Benjamin Chow, the co-founder and former CEO of Meteora.
Regarding the first continuity theory, the court viewed the alleged conduct running from October 2024 through the March 2025 complaint as a six-month window. The existence of multiple schemes and a potentially large victim pool did not compensate for the brevity of the period.
The opinion cited Second Circuit precedent, which generally requires a longer timeframe for this type of continuity, while explicitly noting that two years is not a hard statutory limit.
The secondary theory required facts supporting a continuing threat. The court determined that sweeping claims about a repeatable token-launch business model and referrals to other projects did not demonstrate, for each defendant, that alleged wire fraud constituted a regular practice. Related RICO conspiracy claims were also rejected.
A proposed amendment sought to add the MELANIA, ENRON, and TRUST tokens, an additional plaintiff, and new defendants. However, the judge ruled this only extended the alleged racketeering window to seven months and offered no facts to cure the continuing-threat deficiency.
Following the failure of the RICO claims, the court dismissed the Kelsier defendants’ remaining state-law claims due to a lack of personal jurisdiction. Assertions regarding nationwide social media activity and crypto infrastructure were deemed insufficient to establish the necessary ties to New York. The court did not evaluate the merits of those state-law claims.
All claims against Chow were dismissed for pleading defects, including inadequate allegations of fraudulent intent. Claims against Meteora failed because investors did not sufficiently plead it as a legal association or partnership liable to suit.
Hayden Davis denied wrongdoing and raised jurisdiction objections in June 2025. This new ruling transforms that earlier procedural dispute into a tangible setback for investors pursuing recovery through this specific action.
The order does not establish that every alleged act was lawful, nor does it adjudicate the status of every other potential recovery path.