LIBRA Memecoin Scandal: Defendants Named in Class-Action Suit

Kelsier Ventures, KIP Protocol, and Meteora have been sued in a New York court for their alleged role in the LIBRA token scandal, which saw around $107 million pooled from investors. The LIBRA token scandal is set to be reviewed by the Supreme Court of New York after a newly filed class-action lawsuit accused its creators of misleading investors and siphoning over $100 million from one-sided liquidity pools.

Details of the Class-Action Lawsuit

Burwick Law filed the suit on behalf of its clients against Kelsier Ventures, KIP Protocol, and Meteora on March 17 for launching the LIBRA (LIBRA) token in a “deceptive, manipulative and fundamentally unfair” manner. The token was then promoted by Argentine President Javier Milei on X as an economic initiative to stimulate private-sector funding in the country.

Allegations Against Kelsier Ventures and Partners

The law firm slammed the two crypto infrastructure and launchpad firms behind LIBRA — KIP and Meteora — claiming that they used a “predatory” one-sided liquidity pool to artificially inflate the memecoin’s price, allowing while “everyday buyers bore the losses.” Within hours, the insiders “rapidly siphoned approximately $107 million from the liquidity pools,” causing a 94% crash in LIBRA’s market value, Burwick Law in a March 17 filing shared on X.

Misleading Promotion and Investor Impact

Burwick accused the defendants of leveraging Milei’s influence to aggressively promote the token, deliberately creating a false sense of legitimacy and misleading investors about its economic potential. Approximately 85% of LIBRA’s tokens were withheld at launch, and the “predatory infrastructure techniques” allegedly used by the defendants weren’t disclosed to investors, Burwick said.

Involvement of Kelsier Ventures and CEO Hayden Davis

The venture capital firm behind the LIBRA token, Kelsier Ventures, and its CEO, Hayden Davis, were apparently two of the key players from the token launch. They are believed to have netted around $100 million. Davis, who is now facing a potential legal challenge following an Argentine lawyer’s request, stated on Feb. 17 that he didn’t directly own the tokens and wouldn’t sell them.

Javier Milei’s Position on the LIBRA Token

Meanwhile, Milei has distanced himself from the memecoin, arguing he didn’t “promote” the LIBRA token — as allegations against him have suggested — and instead merely “spread the word” about it. This distancing comes amid growing scrutiny over the role of public figures in cryptocurrency promotions and the potential consequences of misleading investors.

Implications for the Cryptocurrency Market

The LIBRA token scandal raises significant questions about the regulatory landscape surrounding cryptocurrencies and the responsibilities of those who promote them. As the case unfolds, it could set important precedents for how similar cases are handled in the future. Investors are increasingly wary of the risks associated with new tokens, especially when they are backed by high-profile endorsements.

Conclusion: The Future of LIBRA and Its Defendants

As the legal proceedings continue, the future of the LIBRA token and its creators remains uncertain. The outcome of this class-action lawsuit could have far-reaching implications for the cryptocurrency industry, particularly in terms of investor protection and regulatory oversight. Stakeholders are advised to stay informed about the developments in this case, as it may influence future investments and the overall market landscape.