NY Court Dismisses Class Action Lawsuit Over LIBRA and M3M3 Tokens

The U.S. District Court for the Southern District of New York has dismissed a significant class action lawsuit involving the issuance of LIBRA and M3M3 tokens. U.S. District Judge Jennifer L. Rochon issued the ruling on October 1, 2026, granting a dismissal for defendants Hayden Davis, Kelsier Ventures, and former Meteora CEO Ben Chow. The court’s decision centered on the plaintiffs' failure to meet specific legal requirements and procedural standards necessary to sustain the litigation. Notably, the judge also denied the plaintiffs' request for a further amendment to their complaint, effectively halting the current legal proceedings against the named parties.

Legal Thresholds and Procedural Failures

A primary factor in the court's decision was the plaintiffs' inability to prove that Meteora functioned as an unincorporated association capable of being sued under current legal frameworks. The court determined that the structural evidence provided did not satisfy the criteria for such a designation. Furthermore, the allegations brought under the Racketeer Influenced and Corrupt Organizations Act (RICO) were dismissed as they failed to demonstrate the necessary pattern of continuous criminal activity required by the statute.

• The court found no evidence of a "sustained enterprise" as defined by RICO.
• Claims against Ben Chow regarding fraudulent activity did not meet the heightened pleading standards for such allegations.
• The plaintiffs were denied a third opportunity to amend their filing, as the court deemed previous attempts insufficient to rectify legal deficiencies.

Scope of the Judicial Ruling

It is important to note that the dismissal was based on procedural and jurisdictional grounds rather than the underlying merits of the tokens' market behavior. The ruling did not include a fact-finding mission regarding market manipulation or the specific economic impact of the LIBRA and M3M3 assets. Instead, Judge Rochon focused on whether the plaintiffs had correctly identified the legal entities involved and whether the claims of fraud and racketeering met the strict evidentiary burdens required in the Southern District of New York.

The court's ruling was based solely on whether the plaintiffs' claims and legal elements were met, and did not address whether market manipulation or fraud actually occurred.

The dismissal of this case highlights the complexities of litigating within the decentralized finance (DeFi) and digital asset sectors, where defining corporate structures and individual liability remains a significant hurdle for plaintiffs. While the defendants have successfully navigated this class action, the case underscores the ongoing judicial scrutiny facing token issuers and venture capital firms within the broader cryptocurrency ecosystem. As of now, the legal status of the LIBRA and M3M3 tokens remains unchanged, though the dismissal provides a precedent for how unincorporated entities are treated in federal court.