The Supreme Court of New York is set to review a class-action lawsuit alleging that the creators of the Libra (LIBRA) token misled investors and orchestrated a fraudulent scheme that siphoned over $100 million from manipulated liquidity pools.
The case, filed on March 17 by Burwick Law, targets Kelsier Ventures, KIP Protocol, and Meteora, accusing them of launching the token in a “deceptive, manipulative, and fundamentally unfair” manner.
The Libra token gained widespread attention after being publicly endorsed on social media platform X by Argentine President Javier Milei, who positioned it as an economic initiative aimed at boosting private-sector investment in Argentina.
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Lawsuit Alleges Insiders Rigged Libra Token Launch for Massive Profits
However, the lawsuit claims that the real beneficiaries of the token launch were insiders who engineered a predatory liquidity structure to maximize their profits at the expense of retail investors.
According to the legal filing, KIP and Meteora—two crypto infrastructure and launchpad firms behind LIBRA—artificially inflated the token’s price using one-sided liquidity pools.
This tactic allegedly allowed insiders to cash out rapidly, leaving “everyday buyers to suffer the losses.” Within hours of launch, insiders had allegedly extracted approximately $107 million, triggering a 94% crash in LIBRA’s market value.
While President Milei is mentioned in the lawsuit, he has not been named as a defendant. However, Burwick Law argues that the defendants exploited Milei’s influence to create a false sense of legitimacy, misleading investors into believing that LIBRA was a government-backed initiative.
The lawsuit also reveals that 85% of LIBRA’s token supply was withheld at launch, with no disclosure to investors regarding the “predatory infrastructure techniques” allegedly used to manipulate the market.
The plaintiffs contend that key liquidity details were deliberately hidden, depriving investors of critical financial information before they committed funds.
Burwick Law is seeking compensatory and punitive damages, along with the return of illicit profits and an injunction to prevent further fraudulent token offerings.
Tonight, our firm filed a class action complaint in the Supreme Court of New York on behalf of our client. We allege that Kelsier, KIP, Meteora, and related parties orchestrated an unfair token launch ($LIBRA), allegedly misleading purchasers and harming retail investors. pic.twitter.com/H7dD2LaARK
— Burwick Law (@BurwickLaw) March 18, 2025
According to blockchain research firm Nansen, an analysis of 15,430 major LIBRA wallets found that over 86% of investors sold at a loss, collectively amounting to $251 million in damages. In contrast, just 2,101 wallets turned a profit, amassing $180 million in gains.
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Kelsier Ventures CEO Allegedly Pocketed $100M from Libra Token Scheme
Among those who allegedly profited the most from the scheme were Kelsier Ventures and its CEO, Hayden Davis, who reportedly netted around $100 million from the token launch.
Davis, now facing a potential Interpol red notice, has denied direct ownership of the tokens and insists he did not sell them.
Meanwhile, President Milei has attempted to distance himself from the controversy, maintaining that he did not “promote” the LIBRA token but merely “spread the word” about it.
Despite facing fraud-related lawsuits, Milei has avoided direct legal repercussions. However, Argentina’s opposition party has called for his impeachment, though their efforts have yet to gain significant traction.
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Key Takeaways
- The New York Supreme Court will review a lawsuit accusing the Libra token’s creators of misleading investors and orchestrating a $100 million fraud.
- The lawsuit claims insiders manipulated liquidity pools, causing a 94% crash while profiting at the expense of retail investors.
- Argentine President Javier Milei promoted the token but denies wrongdoing, as calls for his impeachment face limited success.
The post New York Supreme Court To Review Libra Token Scandal Amid $100M Fraud Allegations appeared first on 99Bitcoins.
