The designers of a cryptocurrency launched by the US first lady, Melania Trump, in January were accused in court filings on Tuesday of orchestrating a pump-and-dump scheme.
The $MELANIA coins were released for just a few cents each on 19 January, the day before Donald Trump was inaugurated as US president. In addition to $MELANIA, Donald Trump launched $TRUMP a few hours before his inauguration.
Within hours, the $MELANIA coin’s price soared to $13.73.
However, it then collapsed almost as quickly, and is now only worth about 10 cents – less than 1% of its peak price. $TRUMP traded at a peak of $45.47 and now goes for $5.79, according to Coin Market Cap.
The plaintiffs say the coin’s creators organized the operation knowing that the digital currency’s value would plummet.
Melania Trump herself is not named in the lawsuit. The plaintiffs said they did not believe she was “culpable”, but accused the crypto companies of using her and other familiar faces as “window dressing” for their crimes.
In newly filed court papers, investors accuse the executives of the Meteora cryptocurrency exchange platform, on which $MELANIA was initially traded, of setting up a scheme that allowed them to indirectly purchase large quantities of the virtual coin.
Their accomplices then quickly resold these digital currencies, pocketing substantial profits while causing the price to plummet, according to documents filed on Tuesday in Manhattan federal court.
The allegations concerning $MELANIA have been added to legal proceedings involving several other cryptocurrencies, which began in April. Meteora did not immediately respond to a request for comment.
The Trump family has pocketed more than $1bn in pre-tax profits from several cryptocurrency-related products and companies over the past 12 months, the Financial Times reported last week.
