In a startling development, a cryptocurrency tied to Melania Trump has become the center of a fraud lawsuit, raising questions about ethical boundaries in the crypto space.
According to MSNBC, the lawsuit, targeting the makers of the $MELANIA meme coin, alleges a deceptive scheme that led to significant investor losses, while also drawing scrutiny to Melania Trump's promotional role as first lady.
The story began earlier this year when Melania Trump endorsed $MELANIA, a meme coin named in her honor, with a post on X around her husband’s inauguration in January. That endorsement helped propel the coin’s value to a peak of $12.95 per coin, attracting numerous investors eager to capitalize on the hype. However, the coin’s value plummeted over time, and as of last Friday, it was trading for less than a dime per coin.
The promotion of $MELANIA by Melania Trump, while she served as first lady, has sparked significant ethical debate. Critics argue that using such a high-profile position to boost a speculative digital asset crosses traditional norms of conduct. This has led to accusations of a double standard in how the media covers such actions compared to the potential scrutiny of other former first ladies.
Following the initial surge, $MELANIA flopped, leaving many investors with substantial losses and prompting legal action. A lawsuit was first filed in April against the coin’s creators, Benjamin Chow and Hayden Davis, accusing them of fraud. The plaintiffs allege that Chow and Davis orchestrated a pump-and-dump scheme, inflating the coin’s value before selling off their holdings at a profit.
The lawsuit claims this deceptive tactic wasn’t limited to $MELANIA but extended to at least 15 other cryptocurrencies, including $LIBRA, promoted by Argentina’s President Javier Milei.
Investors assert that Chow acted as the primary orchestrator, with Davis as a key collaborator, causing millions in damages to unsuspecting buyers. Neither Melania Trump nor Milei is accused of operating the scheme or engaging in any illegal activity.
The legal battle has evolved since its initial filing, with the complaint already amended once to include additional details. On Tuesday, plaintiffs sought court permission to file a second revised complaint, citing new information from an anonymous whistleblower. This proposed update further details the extent of the alleged fraud orchestrated by Chow and Davis across multiple digital assets.
While Melania Trump is not a defendant in the lawsuit, the plaintiffs describe her as being used as a facade to lure investors. They claim her high-profile status lent credibility to the coin, masking the fraudulent intent of its creators. Earlier this month, she reposted a company slogan, “Into the Future,” alongside her image, further tying her name to the project.
The controversy has also drawn political attention, with Congressional Democrats earlier this year accusing President Trump of corruption tied to his family’s involvement in the crypto industry. They specifically criticized Melania Trump’s promotion of $MELANIA as emblematic of broader ethical lapses within the family’s business dealings. This has amplified public discourse about the intersection of politics, personal branding, and speculative investments like meme coins.
Attempts to seek comment from relevant parties have so far been unsuccessful, adding to the opacity surrounding the case. The White House, along with Chow and Davis, did not respond to requests for statements from MSNBC last Friday. This lack of response leaves many questions unanswered about the motivations and accountability of those linked to $MELANIA.
President Trump himself has offered minimal insight into his family’s crypto ventures, including $MELANIA. When asked about his own cryptocurrency shortly after its announcement, he stated, “I don’t know much about it other than I launched it.” He added, “I heard it was very successful,” though he did not elaborate further on the specifics or the subsequent fallout.
The fallout from $MELANIA’s collapse has left investors reeling, with many facing significant financial losses due to the alleged scheme. The case highlights the risks of meme coins, which often rely on hype and celebrity endorsements rather than tangible value. It also raises broader concerns about trust and regulation in the largely unregulated cryptocurrency market.
As the lawsuit progresses, it could set important precedents for how fraudulent schemes in the crypto space are addressed legally. The involvement of high-profile figures, even peripherally, may push lawmakers to consider stricter oversight of digital assets. For now, investors and observers alike await further developments in the case and potential responses from those implicated.