Judge Lifts Freeze on $57.6 Million Related to Libra Token
A federal judge in Manhattan has lifted the freeze on $57.6 million in USDC related to the controversial Libra token—an initiative that was first unveiled in February and touted by Argentine President Javier Milei. This decision was made by Judge Jennifer L. Rochon, who acknowledged that plaintiffs in the case had not adequately demonstrated that the defendants posed a flight risk or had been evasive in their legal obligations, leading to her belief that the defendants would not abscond with the funds.
Background of the Case
The asset freeze had been originally imposed after the plaintiffs sought damages exceeding $100 million, claiming that the defendants, Hayden Davis and Ben Chow, misled investors regarding Libra’s legitimacy. The two are tied to Kelsier Labs LLC and the decentralized exchange Meteora, respectively. Both defendants cooperated with the court, which contributed to the judge’s decision to unfreeze the funds. Judge Rochon noted that the plaintiffs had not substantiated their claims of irreparable harm that would warrant keeping the assets frozen.
Judge’s Remarks and Legal Implications
Judge Rochon’s remarks included skepticism about the plaintiffs’ chances of success as the case progresses, despite her assertion that it remains in its preliminary stages.
In response to the ruling, Davis’s attorney, Mazin Sbaiti, characterized the plaintiffs’ case as devoid of merit, stating, “Today’s hearing and decision reveal the case for what it is.”
Controversy Surrounding the LIBRA Token
The legal turmoil surrounding the LIBRA token stems from its promotion as a funding mechanism for small businesses in Argentina, leading many to mistakenly believe it was an official currency for the country. This misrepresentation was exacerbated by Milei’s post on social media. The token originally boasted a market valuation of approximately $1.17 billion, only to later plummet to a mere $33 million within a day due to allegations of insider trading and Milei’s subsequent deletion of his promotional post.
Attempts at Transparency and Fallout
In terms of transparency, as the situation deteriorated, Davis attempted to clarify the circumstances surrounding LIBRA’s launch but became embroiled in the controversy. He claimed to have served as an advisor to President Milei and stated that his involvement was merely custodial regarding the funds raised.
The situation further complicated when it was disclosed that Chow’s firm had connections to various projects, including a meme coin associated with First Lady Melania Trump. Following the chaos of LIBRA’s collapse, Chow resigned from Meteora, with concerns raised about his judgment in collaborating with Davis.
Moving Forward
With the assets now accessible again, both Chow and Davis are making strides to clear their reputations, marking a significant moment in this ongoing legal saga.
