- A New York court dismissed the LIBRA investors’ claims with prejudice, ending the action without ruling on whether the alleged conduct was lawful.
- The court found that the plaintiffs had not adequately pleaded the continuity required for federal RICO claims against Kelsier Ventures, Hayden Davis and Benjamin Chow.
- State-law claims also failed on jurisdiction and pleading grounds, while a proposed amendment adding MELANIA, ENRON and TRUST did not cure the deficiencies.
New York Court Dismisses LIBRA Racketeering Case
A New York court has dismissed with prejudice the claims brought in connection with the LIBRA cryptocurrency launch, resolving the legal sufficiency of the allegations and the court’s jurisdiction. The ruling did not determine whether every act alleged by the investors was lawful, nor did it address every other potential avenue for recovery.
According to the complaint as recounted by the court, LIBRA launched on Feb. 14, 2025. Milei promoted the token before withdrawing his support later that day. The lawsuit targeted defendants including Kelsier Ventures, Hayden Davis, Benjamin Chow, and Meteora co-founder and former CEO Benjamin Chow, as well as other parties connected to the alleged scheme.
Why the RICO Claims Failed
The central federal claim was brought under the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO. To proceed under RICO, plaintiffs must adequately plead a pattern of related racketeering acts that either extends over a substantial period or creates a threat of continuing criminal activity.
The court found that neither form of continuity had been sufficiently pleaded against the Kelsier defendants, including Kelsier Ventures and Hayden Davis, or against Benjamin Chow. For the first form of continuity, the court treated the alleged conduct as running from October 2024 through the filing of the complaint in March 2025—a period of approximately six months. The court held that the number of alleged schemes and the potentially large group of victims did not overcome the relatively short duration.
The opinion applied Second Circuit precedent generally requiring a longer period for this type of continuity, while also recognizing that two years is not an absolute cutoff. The alternative theory, based on a continuing threat, also failed. Broad allegations that the defendants operated a repeatable token-launch business and referred participants to other projects did not establish, on a defendant-by-defendant basis, that alleged wire fraud was a regular business practice. The related RICO conspiracy claims therefore failed as well.
Proposed Amendment Did Not Cure the Defects
The plaintiffs sought to amend the case by adding the tokens MELANIA, ENRON and TRUST, along with another plaintiff and new defendants. The judge found that the proposed amendment would have extended the alleged racketeering period to only seven months and still provided no facts establishing a continuing threat.
Because the RICO claims failed, the court dismissed the remaining state-law claims against the Kelsier defendants for lack of personal jurisdiction. Allegations involving nationwide social media activity and cryptocurrency infrastructure were not enough to establish the necessary connections to New York. The court therefore did not reach the merits of those state-law claims.
The claims against Benjamin Chow were dismissed because of pleading defects, including insufficient allegations that he acted with fraudulent intent. Claims against Meteora also failed because the investors had not adequately pleaded that Meteora was a legal association or partnership capable of being sued.
Hayden Davis Had Previously Challenged the Case
Hayden Davis denied wrongdoing and objected to jurisdiction in June 2025. The latest ruling converts that earlier dispute into a concrete setback for investors seeking recovery through this action, although it does not establish that all alleged conduct was lawful or resolve the status of other possible recovery routes.
Why This Matters
The ruling underscores the demanding pleading requirements for investors seeking to use RICO in cryptocurrency litigation. Allegations involving multiple projects, a potentially broad victim group and an alleged repeatable business model were not sufficient here without facts showing the required duration or a defendant-specific threat of continuing criminal activity.
The decision also limits this particular lawsuit on procedural grounds. The court dismissed the state-law claims against the Kelsier defendants for lack of personal jurisdiction, while separate claims failed because of inadequate allegations concerning fraudulent intent or Meteora’s legal capacity to be sued. The dismissal does not decide whether other recovery mechanisms may remain available.
Frequently Asked Questions
What did the court decide in the LIBRA case?
The New York court dismissed all claims with prejudice. It found that the RICO allegations did not adequately establish the required continuity and dismissed other claims on jurisdictional and pleading grounds.
Why did the RICO claims fail?
The alleged racketeering period was treated as approximately six months, which the court found insufficient for the required continuity. The plaintiffs also did not provide defendant-specific facts showing a continuing threat of regular wire fraud activity.
Did the ruling determine that the alleged conduct was lawful?
No. The court resolved the legal sufficiency of the claims and its jurisdiction but did not decide whether every alleged act was lawful or address every possible recovery route.
