Topline
First Lady Melania Trump’s $MELANIA memecoin is now under legal scrutiny, as a court filing this week alleges the cryptocurrency is part of a broader fraudulent “pump-and-dump” scheme meant to enrich a small number of insiders and the first lady was duped into making the fraudulent scheme seem more credible.
First Lady Melania Trump speaks at the White House on Oct. 10.
Copyright 2025 The Associated Press. All rights reserved
Key Facts
$MELANIA, a “memecoin” cryptocurrency token that describes itself as being “official” and has been publicized by the first lady, launched in January around the same time as her husband President Donald Trump’s inauguration.
A lawsuit brought by cryptocurrency traders was initially filed in April, which argues a coalition of cryptocurrency developers behind a number of memecoins—including $M3M3, $LIBRA, $ENRON and $TRUST—carried out a fraudulent “pump-and-dump” scheme using the tokens, in which they allegedly manipulated the coins’ launches in order to personally enrich themselves while causing others who bought the coins to lose their investments.
Plaintiffs filed an updated version of their lawsuit Tuesday, which alleges $MELANIA was also part of the fraud scheme.
The lawsuit does not allege Melania Trump played any role in the fraud, instead painting the first lady as serving as “window dressing” to the fraud scheme by unwittingly lending credibility to it by endorsing the memecoin.
The first lady was unaware of the alleged fraud, plaintiffs claim, arguing if her team had “been aware that the project was part of a coordinated criminal scheme, they would have rescinded any consent immediately.”
The White House and attorneys for the defendants have not yet responded to requests for comment.
Crucial Quote
“$MELANIA was not a legitimate or endorsed token, but a fraud that misused intellectual property and public trust to create the illusion of integrity while executing a Theft,” the lawsuit alleges. “Investors believed they were supporting a celebrity-endorsed innovation. In truth, they were providing liquidity to an insider-controlled market rigged for collapse.”
How Did The Alleged Fraud Scheme Work?
The lawsuit alleges the defendants—crypto developer Benjamin Chow and leaders at marketing group Kelsier Ventures, among others—repeatedly followed a “playbook” of launching new memecoins, which involved using strategic methods to inflate value and then selling their own holdings while prices were high, leading the token’s value to plummet and other investors to lose their money. The defendants allegedly used their own system within the Solana blockchain to have privileged access to a memecoin and determine when shares were deployed, meaning they could buy up shares when prices were low and control access to the memecoin in order to drive demand. The defendants also allegedly used influencers and paid social media posts to promote the tokens, making buyers think there was organic enthusiasm about the coins when there actually wasn’t. Celebrities like Melania Trump were further used to drive enthusiasm, with the lawsuit alleging the first lady’s endorsement of the $MELANIA coin was part of a broader effort to use “borrowed” fame to promote the memecoins, also seen through tokens like $ENRON, which capitalized on the failed company’s notoriety. Melania Trump’s ties to the memecoin “expand[ed] the victim pool beyond crypto traders to mainstream consumers who associated the Melania Trump brand with credibility and sophistication,” the lawsuit alleges. The defendants then allegedly used manipulation tactics to spike the prices of the memecoins, before pulling out their shares while the price was high and causing the value of the tokens to tank. While investing in cryptocurrency is notoriously volatile to begin with, the plaintiffs allege the people who invested in the memecoins were led to believe that any changes in the tokens’ values were based on independent market forces, but instead, customers were “entering a market dominated by a handful of individuals who dictated outcomes behind the scenes.”
Big Number
$85.06 million. That’s $MELANIA’s market capitalization as of Wednesday afternoon, with a price of $0.09346. The value of the first lady’s memecoin has plunged since it was introduced in January: The token hit a market cap of more than $2 billion right after launching before losing more than 50% of its value within days. That volatility is evidence of the fraudulent scheme, the lawsuit alleges, claiming the value of the token plummeted because of the insiders involved in the scheme selling their shares while the prices were high.
What To Watch For
It’s unclear how long it will take the case over $MELANIA to play out, and whether it could go to trial. Plaintiffs in the case are asking for a variety of relief, including requiring the defendants to turn over all the profits they made off the alleged scheme, barring them from carrying out further schemes in the future and appointing an independent receiver who will take control of Meteora, the system within the Solana blockchain network the defendants allegedly used.
Forbes Valuation
Forbes values Melania Trump’s net worth at roughly $20 million as of September. The memecoin makes up a sizable portion of the first lady’s fortune, along with ventures like her books, speeches and a documentary. Her husband is worth far more, with Forbes valuing the president’s net worth at approximately $7.1 billion as of Wednesday afternoon.
Key Background
The $MELANIA memecoin is part of a broader effort by President Donald Trump and his family to get into cryptocurrency, which has now become a major source of the president’s wealth. The president has added approximately $2 billion to his net worth through his cryptocurrency ventures since taking office, between his own $TRUMP memecoin, bitcoin holdings and crypto dealings through World Liberty Financial, his family’s decentralized crypto venture. Son Eric Trump has also become a billionaire through his crypto ventures, and even 19-year-old Barron Trump is now worth an estimated $150 million after cofounding World Liberty Financial.
Further Reading
Source: https://www.forbes.com/sites/alisondurkee/2025/10/22/melania-under-fire-first-ladys-memecoin-was-part-of-fraudulent-scheme-lawsuit-alleges-what-to-know/
