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Meteora Co-Founder Accused of 15 Token Scams: The Technical Side of a $100M Fraud

· 9 min read
Liquidity Master
DeFi Educator and Strategist

The story of the TRUMP, MELANIA, and LIBRA memecoins just got much darker. According to a lawsuit and blockchain analysis, Benjamin Chow, co-founder of Meteora DEX on Solana, has been accused of being the mastermind behind a scheme involving 15 different token scams that generated over $100 million in profits for insiders while retail investors lost billions.

This isn't just another meme coin rug pull-it's a sophisticated technical fraud that exploited the very infrastructure that was supposed to enable decentralized trading.

The Allegations: From M3M3 to 15 Tokens​

The Original Case​

The lawsuit initially focused on the M3M3 token, where insiders allegedly controlled up to 95% of the supply. This extreme supply concentration allowed them to manipulate prices at will, leaving retail investors with virtually no chance of profiting.

The Expanded Scope​

The lawsuit has now expanded to include 15 different tokens, including the controversial MELANIA and LIBRA memecoins that we covered in our TRUMP memecoin strategy analysis. According to the complaint, a whistleblower shared private messages in which Davis admitted to "conducting at least 15 token issuances at Chow's direction."

This directly links the co-founder of one of Solana's major DEXes to a large-scale, coordinated fraud scheme.

The Technical Manipulation: How It Worked​

Supply Concentration​

The core of the scam was extreme supply concentration:

  • 95% of tokens controlled by insiders
  • 5% available to retail investors
  • This imbalance made price manipulation trivial

When insiders control nearly all supply, they can:

  • Artificially inflate prices by limiting available tokens
  • Crash prices by dumping their holdings
  • Control liquidity to prevent retail from exiting

Technical Advantages Through Code​

The lawsuit alleges that Chow used his position as Meteora co-founder to gain technical advantages:

"Chow has a unique understanding of the code and is able to manipulate liquidity, fee routing, and supply control."

This suggests that Chow could:

  • Embed backdoors in smart contracts at token issuance
  • Control liquidity mechanisms through Meteora's DEX code
  • Manipulate fee routing to extract value
  • Implement hidden features like pause switches or asymmetric fee structures

These technical capabilities gave insiders advantages that ordinary users couldn't access-turning "decentralized" trading into a rigged game.

The Celebrity Endorsement Strategy​

The tokens used celebrity names to create false credibility:

  • MELANIA token (First Lady Melania Trump)
  • LIBRA token (Argentine President Javier Milei)
  • Other tokens using public figures as "props"

The lawsuit claims that Chow and Kelsier Venture Capital "borrowed the credibility of public figures" to make their scheme appear legitimate. The celebrities themselves may have been unaware of the fraud, but their names were used to attract investors.

The 15-Token Playbook​

According to the lawsuit, all 15 tokens followed the same operational model:

  1. Supply Concentration: Insiders control 95% of supply, retail gets 5%
  2. Celebrity Endorsement: Use public figures to create credibility
  3. Technical Manipulation: Control liquidity and prices through Meteora DEX code
  4. Social Hype: Paid influencers and social media campaigns create illusion of popularity
  5. Pump and Dump: Artificially inflate price, then insiders sell off all holdings

This coordinated approach suggests a systematic fraud operation rather than isolated incidents.

The Evidence: Blockchain Analysis​

On-Chain Transparency​

The transparency of blockchain became a key tool for exposing the fraud. According to Gate.com's analysis, blockchain analytics firm Bubblemaps tracked wallet addresses that showed:

  • Clear financial connections between MELANIA and LIBRA developers
  • Insider profits exceeding $100 million
  • Transaction patterns that revealed coordinated manipulation

This on-chain evidence is extremely difficult to refute-all transactions are recorded on a public blockchain that anyone can verify.

The Performative Blacklist​

After the LIBRA token collapsed in February 2025, Meteora allegedly pretended to blacklist Kelsier. The lawsuit claims this was "performative"-a public show of distancing while the fraud continued.

Chow and Meteora leadership allegedly swore statements claiming to be "passive developers of autonomous software," implying they weren't involved in price manipulation. This defense attempts to shift responsibility to the "decentralized protocol" itself.

The $100 Million Profit Scale​

The scale of profits-over $100 million-indicates this was a well-planned, large-scale operation. When insiders control 95% of token supply and sell at price peaks, retail investor funds are effectively transferred directly into insider pockets.

This is a zero-sum game where:

  • Retail investors lose billions
  • Insiders profit hundreds of millions
  • The entire scheme is designed to extract wealth from retail

Why This Matters for Liquidity Providers​

The Meteora Connection​

If you're providing liquidity on Meteora, this case raises serious questions:

  • Can developers manipulate pools? The allegations suggest Chow could control liquidity through code
  • Is the protocol truly decentralized? If developers have privileged access, it's not truly decentralized
  • What other tokens are compromised? If 15 tokens were manipulated, how many more exist?

Red Flags to Watch For​

This case illustrates several critical warning signs:

Supply Concentration

  • If more than 70% of supply is controlled by a few addresses, it's a danger signal
  • 95% concentration (as alleged here) is essentially a guaranteed scam

Celebrity Endorsements

  • Don't assume celebrity association means legitimacy
  • Public figures may know nothing about the actual project

Technical Complexity

  • If you can't understand how a protocol works, be cautious
  • Hidden features or "special mechanisms" are red flags

Platform Reputation

  • Even established platforms can have bad actors
  • Always verify independently, don't trust platform reputation alone

Due Diligence Tools​

Use blockchain analysis tools before providing liquidity:

  • Bubblemaps - Reveals supply distribution and wallet connections
  • Nansen - Tracks fund flows and insider activity
  • On-chain explorers - Verify transactions and wallet addresses yourself

Implications for the Solana Ecosystem​

Trust Crisis​

This case has caused significant damage to Solana's reputation. Meteora is one of the more well-known DEXes on Solana, and the involvement of its co-founder in large-scale fraud triggers a trust crisis for other Solana projects.

The Meme Coin Problem​

Solana's high performance and low transaction fees make it popular for meme coins and rapid token issuance. However, this ease of use has been exploited by scammers:

  • Low issuance costs attract speculative projects
  • Fast transactions enable rapid pump and dump schemes
  • High throughput allows many scam tokens to launch simultaneously

The Meteora case highlights how serious this problem has become.

Regulatory Implications​

This case may prompt the SEC and other regulators to strengthen oversight of:

  • Decentralized exchanges and their developers
  • Token issuance and supply distribution
  • Developer identity verification and compliance obligations

If developers are held responsible for fraud on their platforms, it could redefine responsibility boundaries in DeFi.

The Defense Strategy: "Passive Tool Providers"​

Chow and Meteora's defense claims they are "passive developers of autonomous software"-merely providing tools without controlling how users use them. This is a common defense in DeFi, but the evidence suggests otherwise:

  • Technical manipulation through code access
  • Coordinated token launches at Chow's direction
  • Liquidity control through Meteora's infrastructure

If the court rules that developers are responsible for fraud on their platforms, it will have profound implications for the entire DeFi industry.

What This Means for Investors​

For Meteora Users​

If you're using Meteora or considering it:

  1. Monitor the lawsuit closely-the outcome will determine platform viability
  2. Avoid new tokens with highly concentrated supply
  3. Prioritize audited projects with long-term operational verification
  4. Use blockchain analysis tools for due diligence before investing
  5. Consider alternatives like Orca or Raydium until the case is resolved

For All DeFi Users​

This case reinforces critical lessons:

Trust but Verify

  • Don't trust platform reputation alone
  • Verify supply distribution yourself
  • Use blockchain analysis tools

Understand the Code

  • If you can't understand how a protocol works, be cautious
  • Look for audits and transparency
  • Beware of "special features" or hidden mechanisms

Diversify Risk

  • Don't put all capital in one protocol
  • Spread risk across multiple platforms
  • Stick to established, audited protocols

Watch for Red Flags

  • Extreme supply concentration (70%+)
  • Celebrity endorsements without substance
  • Technical complexity you can't verify
  • Rapid price movements without fundamentals

The Bottom Line​

The Meteora co-founder scandal reveals a dark side of DeFi: technical sophistication can be used to exploit rather than empower users. When developers have privileged access to code and can manipulate liquidity, supply, and fees, "decentralization" becomes a facade.

Key Takeaways:

  • 15 tokens allegedly involved in coordinated fraud
  • $100+ million in insider profits
  • Technical manipulation through Meteora DEX code
  • Celebrity names used to create false credibility
  • Blockchain evidence makes fraud difficult to deny

This case serves as a stark reminder: in cryptocurrency, "trust but verify" is the iron law of survival. Even established platforms can harbor bad actors. Always do your own research, verify supply distribution, and use blockchain analysis tools before providing liquidity.

For more on protecting yourself, see our guides on DeFi risks, smart contract security, and why we don't recommend meme coin liquidity.

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