A cryptocurrency promoted in January by US first lady Melania Trump was part of a sophisticated fraud that “leveraged celebrity association and ‘borrowed fame’ to sell legitimacy to unsuspecting investors,” a new legal filing has alleged.

In April, crypto investors brought a federal class action lawsuit against Benjamin Chow, cofounder of crypto exchange Meteora, and Hayden Davis, cofounder of crypto venture capital firm Kelsier Labs, among other defendants, accusing them of a multimillion-dollar fraud involving a single memecoin, $M3M3.

Later, the plaintiffs filed an amended complaint, expanding the allegations to include racketeering activity. They claimed the pair had colluded to rig the market for $LIBRA, a coin promoted by Javier Milei, president of Argentina, which collapsed in value shortly after launch.

On Tuesday, the plaintiffs sought the court’s permission to file yet another amended complaint, based on alleged information provided by an anonymous whistleblower. With Chow acting as the “commander,” the pair launched, pumped, and dumped at least 15 crypto coins, the proposed second amended complaint alleges, including $MELANIA. The scheme allegedly inflicted millions of dollars in losses on unwitting investors.

Trump, who is not a named defendant in the lawsuit, was used as “window dressing for a crime engineered by Meteora and Kelsier,” the proposed second amended complaint alleges. The filing further states that the plaintiffs do not allege that Trump or Milei “operated the scheme.”

“This case could clarify basic expectations for token launches and disclosures in the US. We understand many across the crypto industry and regulatory community are following closely,” says Max Burwick, senior managing partner at Burwick Law, the law firm representing the plaintiffs.

The White House, Chow, and Davis did not respond immediately to requests for comment.

By the time Chow and Davis launched $MELANIA in January, they had refined a “repeatable six-step ‘playbook’ for pump-and-dump fraud,” the investors claim.

According to the proposed second amended complaint, Meteora controls the technical infrastructure, while Kelsier supplies the necessary capital and orchestrates the promotional campaign, leaning heavily on credibility borrowed from public figures or brands. Together, the filing alleges, they effectively control a network of “sniper” crypto wallets that snatch up large quantities of the coins at artificially discounted prices, then dump them on the market as regular investors pile in.

“Going to try to tell all my buddies early,” Davis told an acquaintance prior to the $MELANIA launch, in a private exchange that features in redacted form as an exhibit in the lawsuit. “I’m about to launch the biggest token ever lol.” (It’s unclear whether Davis was allegedly referring to $MELANIA or $LIBRA.)

Before launch, Davis prepared a carefully coordinated marketing campaign for $MELANIA, recruiting a network of paid crypto influencers to synchronously flood social media platforms with promotional messaging, the proposed second amended complaint alleges. The filing claims the influencers pitched the coin as “fair launch” and “community-led.”

In the hours after public trading began, as hype set in and investors rushed to purchase $MELANIA, the price of the coin increased twelve-fold. The coin had a paper value of $1.6 billion at its height. It has since lost 95 percent of its peak value.

“Investors reasonably interpreted the use of Melania Trump’s name and likeness as evidence of legitimacy and due diligence—trusting that no one of her stature would knowingly associate with a fraudulent venture,” the proposed second amended complaint claims.

But prior to launch, wallets controlled by Meteora and Kelsier had allegedly accumulated almost a third of the entire $MELANIA supply. “Insiders had already cornered the market before a single public buyer could act,” the proposed filing claims.

As the $MELANIA price climbed, the insider wallets began to sell, earning millions of dollars within hours of launch, according to the proposed second amended complaint. The large sales caused the price to collapse, inflicting steep losses on the regular people who had bought in.

Though the complaint does not allege any wrongdoing on the part of Trump, her family has been criticized heavily for its many and various forays into the crypto industry, which critics have cast as a glaring conflict of interest. The Financial Timesrecently estimated that the Trump family had earned more than $1 billion from its crypto pursuits in the period since Donald Trump was reelected as US president.

“The misuse of Melania Trump’s name magnified the harm,” the proposed second amended complaint alleges. “It corrupted public trust and injected an element of political and cultural credibility into what was, in reality, a standard pump-and-dump.”