Burwick Law has filed a class action lawsuit in New York against Kelsier Ventures, KIP Protocol, and Meteora, accusing them of running a deceptive launch in the LIBRA token scandal.
According to the lawsuit filed on Mar. 18, the token’s developers secretly manipulated liquidity to defraud retail traders of millions of dollars while misleading investors with false promises.
LIBRA was marketed as an initiative to boost Argentina’s economy, even getting President Javier Milei’s support. However, the token’s developers allegedly inflated prices using a one-sided liquidity pool rather than a fair launch.
To maintain control over the token’s value, they withheld 85% of its supply. Insiders allegedly withdrew $107 million when trading began, resulting in a 94% price collapse. Court documents claim this allowed insiders to “discreetly and systematically extract stable assets” from unsuspecting buyers.
In addition to seeking restitution for impacted investors, Burwick Law hopes to stop future scams of this nature. In a similar development, on Mar. 12, Argentine attorney Gregorio Dalbón requested an Interpol Red Notice for Hayden Davis, the CEO of Kelsier, claiming that his wealth would allow him to escape.
A Red Notice is essentially an Interpol alert requesting global law enforcement to locate and provisionally arrest a person pending extradition.
The LIBRA token launched on Solana (SOL) in Feb. 14 and quickly reached a $4.4 billion market cap before crashing, wiping out over $280 million in value across nearly 75,000 traders. Dubbed “Cryptogate,” the controversy has given rise to multiple allegations of insider trading and market manipulation.
According to a Mar. 14 report by Crypto.news, insiders such as Kelsier Ventures were able to access LIBRA tokens before the public launch, making more than $100 million through early trades and liquidity provision.
Beyond legal action, the Libra memecoin scandal has garnered political attention. Opposition politicians in Argentina have called for Milei’s impeachment, citing allegations of fraud. Analysts say the crisis could hurt Milei’s image as a leader focused on economic recovery and fighting corruption as the midterm elections approach later this year.
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