A US federal judge has dismissed the LIBRA class action against Hayden Davis, Kelsier Ventures, former Meteora CEO Benjamin Chow, and Meteora defendants, bringing an end to the legal proceedings. According to the 81-page ruling issued on September 29 from the US District Court for the Southern District of New York, Judge Jennifer L. Rochon granted motions to dismiss filed by Chow and the Kelsier defendants, while Dynamic Labs secured dismissal of claims against Meteora. The court denied plaintiffs Omar Hurlock and Anuj Mehta permission to file a second amended complaint, finding that proposed changes would not cure identified deficiencies. The amended complaint was dismissed with prejudice and the case was closed. As per High Signal Summary, the ruling is procedural rather than an acquittal on the facts, with the court making no factual finding that manipulation or fraud did or did not occur. Chow's lawyers at Cahill Gordon & Reindel described the result as "a complete dismissal" for their client.
The court separately dismissed RICO claims against the Kelsier defendants after finding plaintiffs had not adequately pleaded a pattern of racketeering activity. Plaintiffs sought to connect conduct surrounding M3M3 and LIBRA into a continuing enterprise, but the court found that alleged activity spanning approximately six months from October 2024 through March 17, 2025 did not satisfy continuity requirements needed for a RICO pattern. Claims under RICO require more than allegations of related misconduct, with plaintiffs needing to establish a pattern that satisfies either closed-ended continuity or open-ended continuity where alleged conduct presents a continuing threat. As per High Signal Summary, the RICO conspiracy count failed because once the core pattern claim collapsed, the derivative conspiracy claim collapsed with it. RICO also served as the plaintiffs' hook for nationwide service of process, and once that hook fell, so did the court's reach over the Kelsier defendants on remaining state-law claims. The accusations, according to Judge Rochon, did not prove the ongoing pattern of illegal action necessary for a RICO claim. The court concentrated on the time frame encompassed by the claimed conspiracy, with the plaintiffs' roughly six-month timeframe deemed insufficient to prove the necessary pattern.
A key aspect of the ruling centered on whether Meteora could be treated as a legal entity capable of being sued. Dynamic Labs Limited, which the court describes as the British Virgin Islands developer and purported intellectual-property owner of the Meteora protocol, intervened and argued that Meteora is software. Plaintiffs described Meteora as an association made up of Chow and several other people and entities involved in developing and operating its programs on Solana. However, Rochon found that the plaintiffs "have not sufficiently pleaded that Meteora is an unincorporated association capable of being sued under New York or federal law." The court specifically rejected the plaintiffs' comparison of Meteora's code update mechanism to a board of directors, stating that "Meteora code being updatable by a majority of the authorized wallet holders is not 'analogizable to a 7-member Board of Directors." The order also notes that the plaintiffs dropped this theory in their proposed second amended complaint, leaving them unable to establish the legal existence required for claims against the protocol. The court treated Meteora differently from other defendants, examining it from the perspective of software and decentralized infrastructure rather than acknowledging the plaintiffs' description of it as an organization similar to a traditional business.
Claims against Benjamin Chow, Meteora's co-founder and former CEO, were dismissed separately under Rule 12(b)(6) after the court found allegations did not adequately establish fraudulent intent. Plaintiffs had tied Chow to both M3M3 and LIBRA, alleging he worked with Kelsier on the M3M3 platform and provided technical support around token launches. For LIBRA, allegations included assistance with Meteora's liquidity infrastructure before the token went live. Rochon found that Chow's knowledge of Kelsier launching LIBRA using Meteora, technical assistance, and fees earned through the protocol were not enough to plausibly show intent to participate in alleged fraud. Chow had previously resigned from Meteora in February 2025 after questions emerged over the project's relationship with LIBRA and Kelsier. The court also set aside a later Chow statement about enabling Davis, treating it as hindsight rather than day-one intent, and found that generic fee or profit motive was not sufficient for fraud claims. The ruling specifically noted that the court's conclusion that the actions detailed in the complaint can also be in line with justifiable backing for token introduction, and that the purported profit motivation was insufficient on its own to prove fraudulent intent.
The case ended before the discovery phase, meaning the court did not determine whether the alleged insider trading or extraction around the tokens actually occurred. As per the court filing, the ruling focused on whether the plaintiffs had adequately pleaded legally viable claims rather than determining the facts of the case. The lawsuit was brought by Omar Hurlock and Anuj Mehta, who accused the defendants of using a network of companies, wallets, and liquidity pools to profit from memecoin launches. Their complaint included fraud, conspiracy, violations of the federal RICO law, New York business law violations, and unjust enrichment claims against all defendants. The complaint had alleged insider pre-positioning and liquidity extraction, claiming insiders took more than 95% of M3M3 supply, and that roughly $80 million to $110 million was pulled from LIBRA. These allegations remain untested since the court did not test them during the proceedings. The ruling closes the same US case that previously resulted in tens of millions of dollars in stablecoins being temporarily frozen, with Circle freezing approximately $57 million in USDC linked to wallets at issue in May 2025. As of October 1, Meteora's official X account had posted about LP incentives and an upcoming event since the ruling but had not commented on it directly.
While the US case has ended, LIBRA remains the subject of legal proceedings in Argentina. Argentine authorities have continued examining fund movement connected to the launch, with a federal judge ordering 25 crypto wallets frozen in August 2026 and seeking information including account holder identities, transaction records, IP addresses and know your customer data. Court documents cited in Argentine proceedings identified eight wallets investigators described as belonging to the 'Libra Team' and linked them to the token's creation and movement of investor funds. The ruling closes the same US case that previously resulted in tens of millions of dollars in stablecoins being temporarily frozen, with Circle freezing approximately $57 million in USDC linked to wallets at issue in May 2025. As of October 1, Meteora's official X account had posted about LP incentives and an upcoming event since the ruling but had not commented on it directly. Markets showed no verified reaction since both tokens have traded as illiquid shells for months, with plaintiffs potentially able to appeal to the Second Circuit though no notice of appeal has surfaced yet. It's critical to distinguish between dismissal and a factual finding - the September 29 order found that the allegations and claims did not meet the legal conditions necessary for the action to proceed, but it did not prove that the purported insider activity, pre-launch fundraising, or fund extraction did not take place, nor did it conclude that fraud took place.
