New York Federal Court Permanently Dismisses LIBRA Class Action

U.S. District Judge Jennifer L. Rochon of the Southern District of New York approved all motions in the case Hurlock v. Kelsier Ventures, dismissing the proposed class action related to the issuance of tokens such as LIBRA and M3M3 against Hayden Mark Davis, Kelsier Labs LLC (operating under Kelsier Ventures), Gideon Davis, Charles Thomas Davis, Benjamin Chow, and the unincorporated entity Meteora. The court denied the plaintiffs' submission of a second amended complaint and closed the case with prejudice.

The case number is 1:25-cv-03891. Plaintiffs Omar Hurlock, Anuj Mehta, and others claimed that Chow, as a key figure in the development and operation of Meteora, collaborated with the Davis family through Kelsier to promote the issuance of tokens like M3M3 and LIBRA on Solana; the complaint also included political-themed tokens like MELANIA in the same operational narrative. The court addressed the amended complaint rather than conducting a factual trial on the on-chain transactions themselves.

The lawsuit against Meteora was entirely dismissed. After Dynamic Labs Limited intervened, it claimed that the agreement lacked the capacity to be sued. The court found that the plaintiffs failed to adequately assert that Meteora constituted a suable partnership or unincorporated organization, nor did they demonstrate the existence of a voluntary association of individuals with shared goals capable of holding property; the proposed second amended complaint still described Meteora as a "collection of individuals behind the code," which also did not pass muster, leading to the dismissal of all claims against Meteora.

For Kelsier, RICO and related federal claims were dismissed for failing to meet the requirements of a pattern of ongoing criminal activity. The court narrowed the core of the complaint to two narratives surrounding the issuance of M3M3 and LIBRA, concluding that even accepting the assertion that "months of planning and technical collaboration" were needed, it was still insufficient to constitute the ongoing racketeering pattern required by RICO. With RICO dismissed, the remaining state law claims against Kelsier were also dismissed due to lack of personal jurisdiction.

As for Benjamin Chow, claims of common law fraud, New York General Business Law Sections 349 and 350, unjust enrichment, and conspiracy all failed to meet the 12(b)(6) standard. The court ruled that providing technical specifications for token issuance, being aware of an impending issuance, and subsequently publicly limiting his role to technical support were insufficient to imply fraudulent intent; nor did they adequately connect Chow's specific statements to Hurlock's purchase of LIBRA and Mehta's purchase of M3M3 in terms of misleading and causation. Cahill, representing Chow, secured the dismissal of all claims. Previously, the same court had lifted the freeze on approximately $57.6 million USDC related to the wallets in question and expressed skepticism about the plaintiffs' chances of success.

Mechanically, this is driven by litigation rather than spot trading. The buyers are retail addresses and law firms seeking class claims after purchasing LIBRA and M3M3, while the sellers and pressured parties are accused of withdrawing liquidity from the pool. After the case closure, the civil claims pathway is shut, and the previously frozen funds are no longer subject to that injunction; Meteora as the protocol layer, Kelsier as the issuance collaboration layer, and Chow as the individual developer are each separated from the narrative of being part of the same criminal enterprise. Platform fees and pool market-making continue to operate under on-chain rules, and legal risks revert from "organizational RICO" to case-by-case proof of specific statements and specific wallet actions.

On a supplementary note: The plaintiffs' lawyers previously claimed to represent over 650 known harmed buyers, with over 400 LIBRA buyers verified to have lost approximately $17 million; the complaint also stated that LIBRA was withdrawn for over $110 million within hours, with even higher withdrawal figures mentioned in market narratives. These figures come from the plaintiffs' assertions, and the court explicitly only examined whether the legal requirements were met, without making factual determinations about whether manipulation or fraud occurred during the issuance process. The case file also records similar arguments regarding the boundaries of developer liability in the Risley case concerning the Uniswap protocol, cited by the defense.

Source: Public Information