TLDR

Burwick Law filed a class action lawsuit against Kelsier Ventures, KIP Protocol, and Meteora over the LIBRA token launch
The lawsuit claims developers manipulated liquidity and defrauded retail traders of millions
LIBRA was marketed as supporting Argentina’s economy and was promoted by President Milei
The token crashed 94% after insiders allegedly withdrew $107 million when trading began
Blockchain research firm Nansen reports investor losses of $251 million from the LIBRA incident

A New York law firm has taken legal action against the companies behind the LIBRA token. Burwick Law filed a class action lawsuit on March 18 against Kelsier Ventures, KIP Protocol, and Meteora. The lawsuit claims these companies ran a deceptive launch that cost investors millions of dollars.

The LIBRA token was created on the Solana blockchain on February 14, 2025. It was marketed as a project to help Argentina’s economy. The token quickly reached a market cap of $4.4 billion shortly after launch.

Argentine President Javier Milei promoted the token on social media. This promotion helped drive investor interest in the project. Many people bought the token believing it had government support.

The lawsuit claims the token’s developers hid their true plans from investors. Court documents state they used a “predatory” one-sided liquidity pool. This method artificially inflated the token’s price.

Tonight, our firm filed a class action complaint in the Supreme Court of New York on behalf of our client. We allege that Kelsier, KIP, Meteora, and related parties orchestrated an unfair token launch ($LIBRA), allegedly misleading purchasers and harming retail investors. pic.twitter.com/H7dD2LaARK

— Burwick Law (@BurwickLaw) March 18, 2025

The developers kept control of about 85% of the token supply. This allowed them to manipulate the market. When trading began, insiders allegedly pulled out $107 million from liquidity pools.

This massive withdrawal caused the token price to collapse by 94%. Around 75,000 traders lost money when the price crashed. The total value wiped out was over $280 million.

Blockchain research firm Nansen looked into the LIBRA incident. They found that investor losses reached $251 million. Their report showed that out of 15,430 large Libra wallets, 86% sold at a loss.

Only 2,101 wallets made a profit from LIBRA. These accounts took home a combined $180 million. Kelsier Ventures and its CEO Hayden Davis were among the biggest winners.

Davis reportedly made around $100 million from the token launch. He later claimed he didn’t directly own the tokens and wouldn’t sell them. This statement came after the price had already collapsed.

The lawsuit seeks to get money back for affected investors. It also aims to prevent similar scams in the future. Burwick Law is asking for both compensatory and punitive damages.

The law firm wants the court to force the defendants to give up their “unjustly obtained” profits. They are also seeking injunctive relief to stop future fraudulent token offerings.

The scandal has been dubbed “Cryptogate” in the crypto community. It has led to several allegations of insider trading and market manipulation. The case has drawn attention to how memecoins can be used to trick investors.

Argentine attorney Gregorio Dalbón has taken separate legal action. On March 12, he requested an Interpol Red Notice for Hayden Davis. A Red Notice asks global law enforcement to locate and arrest a person pending extradition.

Dalbón fears that Davis might flee due to his wealth. The attorney wants to make sure Davis faces justice for his alleged role in the scheme.

President Milei was mentioned in the lawsuit but was not named as a defendant. He has tried to distance himself from the memecoin. Milei claims he didn’t “promote” the token but merely “spread the word” about it.

The scandal has had political consequences in Argentina. Opposition politicians have called for Milei’s impeachment. They cite allegations of fraud related to the token. Analysts say this could hurt Milei’s image as the country approaches midterm elections.

The post LIBRA Token Scandal Leads to Class Action Lawsuit: Who Profited from LIBRA’s Collapse? appeared first on CoinCentral.

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Filed under: News - @ March 18, 2025 11:07 am