$Melania Named As Fraud Tool, Not Token, In Lawsuit

This is quite a busy legal week for Melania Trump. A few days ago Michael Wolff announced he was suing her under an anti-SLAPP statute and now Forbes is running a piece on the $Melania memecoin being part of a pump and dump scheme.  The piece contains this following paragraph, marked as “Crucial Quote” from the lawsuit.

“$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.”

Ouch. That does not pull any punches there. The article goes on to elaborate, “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.”

That is the definition of a pump and dump.

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.”

And that is the key element, right there. If it can be proven that the market was in fact dominated by a handful of individuals in a classic pump and dump scheme, then the plaintiffs will be successful. One of the outcomes the plaintiffs seek from the court is to have the people who made all the money disgorge all the profit they made — but don’t assume that includes Melania.

Not at all, even though memecoin makes up a certain large percentage of Melania’s financial portfolio. The article states that Melania was duped into being “window dressing” and did not play any part in the fraud. Far be it from me to contend that Melania committed a fraud if the plaintiffs are not claiming it. I would merely like to make the point that it does seem to be an odd coincidence that the Trump family has so many lawsuits against it for fraud of one sort or another. The Trump family can’t operate a charity in New York State due to fraudulent activities there at one time and even Melania herself was questioned about a charity that she was allegedly improperly operating in the State of Florida a few years back. Then there was the $25 million settlement in Florida which then-attorney general (of the State of Florida) Pam Bondi negotiated to settle the Trump University case, also an alleged fraud.

And bitcoin is a notoriously infamous business, as Melania would likely know, since her husband just pardoned a bitcoin exec who has been in prison for four months just yesterday.

In any event, this Forbes article tells you what you need to know. It ends on this note:

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.

Must be nice to have $150 million for cofounding a company at age 19 (or any age) right? Say, maybe we could do a Trump calendar for 2026 and design it around the concept of all the lawsuits the family is involved in on any given day. Probably too geekish for the mainstream public but I think it would be a big hit in the legal community of this nation. The First Family and fraud do seem to be intimately acquainted, doncha think?

And no, we’re not going to speculate on what would happen if Michelle Obama or Jill Biden were involved in something like this. We’ll just let that be.

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