"De'Anthony is a valued member of our program," USC said in a statement. "He will have options for his future at USC, including remaining in school on scholarship while continuing to work on his degree and practicing with the team, and potentially compete for the Trojans in the 2018-19 season."
Melton, who averaged 8.3 points and 3.5 assists last season, has not suited up for a game this season as the school investigated what it initially referred to as "a potential issue regarding eligibility."
Federal prosecutors have alleged that Dave Elliott, a Melton family friend, accepted $5,000 with the understanding that he would steer Melton toward would-be agent Christian Dawkins and financial adviser Munish Sood.
According to Melton's attorney, Vicki Podberesky, there is no evidence that an exchange took place. However, while investigating Elliott, other NCAA violations surfaced.
"It came to light through conversations with Elliot and others that Elliot took a plane ticket and possibly payment for a hotel room from Dawkins for [a basketball event in] Las Vegas over the summer," Podberesky said. "There were clearly violations that appeared. There is nothing to suggest De'Anthony knew about these violations, but they're still NCAA violations."
Melton's eligibility issues surfaced after USC assistant Tony Bland was one of four assistant coaches in college basketball accused of accepting bribes to steer players toward agents, financial advisers and apparel companies, as part of an FBI investigation. Bland was arrested in September and pleaded not guilty in November to four charges relating to bribery and wire fraud.
In September, USC hired former FBI director Louis Freeh to conduct an internal investigation into any wrongdoing.
Melton was expected to be key player on a USC team with high expectations. But the Trojans (12-6, 3-2 Pac-12) have struggled with consistency and a lack of depth.
USC junior forward Chimezie Metu expressed frustration with the school's decision on Twitter.
Punishing innocent ppl...I see what y'all on now @USC_Athletics— Chimezie Metu™ (@Chimezie_Metu) January 11, 2018
USC coach Andy Enfield has been adamant that Melton did nothing wrong but was unavailable for comment Thursday. The Trojans practice Friday ahead of Sunday's game at home against Utah.