A lawsuit has been filed against the creators of the Libra (LIBRA) token, accusing them of deceiving investors and taking more than $100 million through an unfair liquidity scheme. The New York Supreme Court will review the case, which could have significant implications for how crypto projects handle investor funds. This lawsuit may uncover one of the biggest cryptocurrency scams in recent years.
The lawsuit was filed by Burwick Law on March 17 against Kelsier Ventures, KIP Protocol, and Meteora, alleging that they launched LIBRA in a deceptive manner. Argentine President Javier Milei also promoted the token on X (formerly Twitter) as a way to boost private-sector funding in Argentina.
The lawsuit criticizes KIP and Meteora for using a “predatory” liquidity pool to artificially drive up LIBRA’s price. Insiders allegedly cashed out with huge profits while regular investors suffered losses. Within hours of its launch, insiders reportedly withdrew around $107 million, causing LIBRA’s value to plummet by 94%.
Although President Milei was mentioned in the lawsuit, he was not named as a defendant. The lawsuit argues that the companies used Milei’s influence to make LIBRA appear more legitimate, misleading investors about its potential. It was also revealed that 85% of LIBRA tokens were held back at launch, information that was not disclosed to investors.
Burwick Law seeks financial compensation for investors, legal action against the companies involved, and measures to prevent future fraud in crypto token launches. According to blockchain analytics firm Nansen, 86% of the largest 15,430 LIBRA wallets sold at a loss, totaling $251 million. Only 2,101 wallets made a profit, earning $180 million.
Kelsier Ventures and its CEO, Hayden Davis, reportedly benefited the most from the scheme, making around $100 million. Davis, who may face an Interpol red notice, denies directly owning or selling the tokens.
President Milei denies actively promoting LIBRA and claims to have only “spread the word” about it. Despite the legal challenges, Argentina’s opposition has been unsuccessful in its attempts to impeach him over the scandal.
The outcome of this case is being closely watched by the crypto community, as it could have implications for future scams. If the creators of LIBRA are not held accountable, it raises concerns about who could be the next target.
Note: Investments carry market risks. Please invest carefully. We do not accept responsibility for any financial losses.
