LIBRA Scandal Shakes the Crypto World: Creators Accused of a $100 Million Fraud!

LIBRA Token Faces Legal Battle Over Alleged Investor Deception Kelsier Ventures, KIP Protocol, and Meteora are now facing a lawsuit in New York’s Supreme Court over their alleged role in the LIBRA token scandal, which reportedly drained over $100 million from investors’ liquidity pools. A class-action lawsuit has been filed against these entities, accusing them of misleading investors and manipulating the market to their advantage. The legal challenge highlights how insiders allegedly used deceptive practices to artificially inflate the token’s value, only to extract massive profits at the expense of retail buyers.

How the LIBRA Token Collapse Unfolded The lawsuit, filed on March 17 by Burwick Law on behalf of investors, claims that LIBRA’s launch was “deceptive, manipulative, and fundamentally unfair.” The token gained widespread attention when Argentina’s President, Javier Milei, mentioned it on X, branding it as an economic initiative to attract private sector funding for the country. The complaint accuses KIP and Meteora, two firms behind LIBRA’s launch, of utilizing a “predatory” single-sided liquidity pool mechanism. This setup allegedly misled investors, making them believe in a fair and decentralized market, when in reality, it was designed to benefit insiders. According to the lawsuit, within hours of launch, insiders swiftly drained around $107 million from liquidity pools, leading to a 94% price collapse. The lawsuit also alleges that 85% of the LIBRA supply was withheld from the market, further exacerbating the imbalance between buyers and sellers.

President Milei Caught in the Controversy – But Not a Defendant Although President Milei was referenced in the lawsuit, he was not named as a defendant. The legal action accuses the defendants of leveraging Milei’s influence to aggressively promote the token, creating a false perception of legitimacy and misleading investors about its true economic potential. Milei has since distanced himself from the LIBRA debacle, stating that he “did not promote” the token but merely “spread the word” about it. Despite this, Argentina’s opposition party has called for his impeachment, though with little success so far.

Investors Suffer Heavy Losses While Insiders Cash Out Blockchain research firm Nansen analyzed 15,430 major LIBRA wallets and found that over 86% of them sold at a loss, amounting to a staggering $251 million in investor losses. Conversely, only 2,101 wallets made profits, collectively withdrawing $180 million. Among the biggest winners were Kelsier Ventures and its CEO, Hayden Davis, who allegedly profited by approximately $100 million. Davis now faces a possible Interpol Red Notice following a legal request from an Argentine lawyer. However, he has publicly denied direct ownership of LIBRA tokens or selling them for personal gain.

Legal Action Seeks Justice for Investors The lawsuit seeks compensatory and punitive damages, the return of “unjustly acquired” profits, and court orders to prevent future fraudulent token launches. Burwick Law argues that the defendants deliberately withheld key information about LIBRA’s liquidity structure, depriving investors of crucial details that could have influenced their decisions. The legal battle is now set to become a major test case for crypto regulation and investor protection. As the case unfolds, all eyes are on whether justice will be served or if the LIBRA scandal will fade into yet another cautionary tale in the crypto industry.

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