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The developers behind a virtual coin launched by US First Lady Melania Trump have been alleged in federal papers of orchestrating a fraudulent operation.

Initial Launch and Value Spike

The $MELANIA tokens were issued for under a dollar each on January 19th, just prior to former President Trump assumed the presidency.

In addition to the $MELANIA coin, Trump himself introduced his personal token just ahead of the swearing-in event.

Within hours, the value of the $MELANIA coin skyrocketed to nearly $14 per token.

Sudden Collapse in Value

Nevertheless, the price plummeted with similar speed, and currently stands at less than 15 cents – less than 1% of its highest value.

In parallel, the $TRUMP cryptocurrency reached a peak of $45.47 and now trades for under six dollars.

Court Claims and Plaintiffs' Position

The plaintiffs claim that the token's architects organized the operation knowing that the cryptocurrency's price would plummet.

Melania Trump personally is not included in the legal action. Investors clarified they do not consider she was responsible, but charged the digital currency firms of using her and other well-known personalities as window dressing for their fraudulent schemes.

Trading Venue Involvement

As per fresh court papers, claimants allege officials of the Meteora cryptocurrency exchange, where $MELANIA was first exchanged, of creating a operation that allowed them to secretly buy large quantities of the virtual coin.

Associated individuals then rapidly offloaded these digital currencies, pocketing substantial profits while leading to the price to plummet, according to records entered in New York federal court.

Broader Context

The claims about the Melania token have been added to judicial actions concerning several other digital currencies, which started in spring.

The Trump family has according to reports earned more than one billion dollars in pre-tax gains from various blockchain-associated products and companies over the past 12 months.