First Lady Melania Trump's Name Allegedly Used in Sophisticated Memecoin Fraud Scheme
US First Lady Melania Trump became the unwitting face of an elaborate cryptocurrency fraud scheme that allegedly resulted in millions of dollars in investor losses, according to new legal filings. The sophisticated operation reportedly leveraged celebrity association and 'borrowed fame' to create artificial legitimacy for multiple memecoins, including one named $MELANIA. Investors claim the scheme followed a repeatable six-step 'playbook' for pump-and-dump fraud, using coordinated marketing campaigns and insider trading tactics to manipulate coin prices before collapsing their value.
The cryptocurrency landscape has witnessed another high-profile scandal involving celebrity names, as US First Lady Melania Trump allegedly became the unwitting centerpiece of a sophisticated memecoin fraud scheme. According to recent legal filings, her name and likeness were used as "window dressing for a crime" that resulted in millions of dollars in losses for unsuspecting investors.
The Alleged Fraud Scheme
According to a proposed second amended complaint filed in federal court, cryptocurrency exchange Meteora cofounder Benjamin Chow and Kelsier Labs cofounder Hayden Davis allegedly colluded to launch, pump, and dump at least 15 crypto coins, including one named $MELANIA. The scheme reportedly followed a "repeatable six-step 'playbook' for pump-and-dump fraud" that the defendants had refined through multiple operations.
The legal filing alleges that Meteora controlled the technical infrastructure while Kelsier supplied capital and orchestrated promotional campaigns. The operation allegedly relied heavily on "credibility borrowed from public figures or brands" to create artificial legitimacy for their cryptocurrency offerings.
The $MELANIA Coin Launch
The $MELANIA coin launched in January amid carefully coordinated marketing efforts. According to court documents, Davis prepared a synchronized promotional campaign that recruited paid crypto influencers to flood social media platforms with messaging that pitched the coin as a "fair launch" and "community-led" initiative.
Prior to the public launch, wallets controlled by Meteora and Kelsier had allegedly accumulated nearly one-third of the entire $MELANIA supply. This pre-launch accumulation meant that "insiders had already cornered the market before a single public buyer could act," according to the proposed complaint.
Market Manipulation and Collapse
In the hours following the public trading launch, the $MELANIA coin experienced a dramatic twelve-fold price increase, reaching a paper value of $1.6 billion at its peak. However, as regular investors rushed to purchase the coin, the insider-controlled wallets began selling their holdings, earning millions of dollars within hours of launch.
The large-scale selling by insiders caused the coin's price to collapse rapidly, resulting in the coin losing 95 percent of its peak value. This pattern allegedly inflicted steep losses on regular investors who had bought into the hype surrounding the First Lady's association with the project.
Legal Implications and Industry Impact
The case could have significant implications for the cryptocurrency industry, potentially clarifying "basic expectations for token launches and disclosures in the US," according to Max Burwick, senior managing partner at Burwick Law, the firm representing the plaintiffs. Industry observers are reportedly watching the case closely, as it may establish important precedents for celebrity-endorsed cryptocurrency projects.
While neither Melania Trump nor Argentine President Javier Milei—whose name was used for another coin in the alleged scheme—are named as defendants in the lawsuit, the case highlights growing concerns about celebrity involvement in cryptocurrency promotions. The Trump family has faced criticism for its various crypto ventures, with the Financial Times estimating they've earned more than $1 billion from crypto pursuits since Donald Trump's reelection.
The alleged misuse of Melania Trump's name "magnified the harm" by "corrupting public trust and injecting an element of political and cultural credibility into what was, in reality, a standard pump-and-dump," according to the proposed legal filing.
