The New York Supreme Court is set to review a lawsuit against the creators of the Libra (LIBRA) token, accusing them of misleading investors and siphoning over $100 million through an unfair liquidity scheme. What started as a promising crypto project quickly turned into a financial nightmare for thousands of investors.
Now, with allegations of manipulation, insider profits, and political influence, the case could set a major precedent for how crypto projects handle investor funds. Could this lawsuit expose one of the biggest crypto scams in recent years?
Here’s what we know so far.
On March 17, Burwick Law filed a class-action lawsuit against Kelsier Ventures, KIP Protocol, and Meteora, claiming they launched LIBRA in a deceptive way. The lawsuit also highlights how Argentine President Javier Milei promoted the token on X (formerly Twitter) as a way to boost private-sector funding in Argentina.
The lawsuit criticizes KIP and Meteora for using a “predatory” one-sided liquidity pool to drive up LIBRA’s price artificially. This setup reportedly allowed insiders to cash out with massive profits while regular investors suffered losses. Within hours of its launch, insiders allegedly withdrew around $107 million, causing LIBRA’s value to drop by 94%.
Although President Milei was mentioned in the lawsuit, he was not named as a defendant. Burwick Law argues that the companies used Milei’s influence to make LIBRA seem more legitimate, misleading investors about its potential. The lawsuit also reveals that 85% of LIBRA tokens were held back at launch, a fact that was not disclosed to investors.
Burwick is seeking financial compensation for investors, legal action against the companies involved, and measures to prevent future fraud in crypto token launches. According to blockchain analytics firm Nansen, 86% of the largest 15,430 LIBRA wallets sold at a loss, totaling $251 million. Meanwhile, only 2,101 wallets made a profit, earning $180 million.
Kelsier Ventures and its CEO, Hayden Davis, were among the biggest beneficiaries, reportedly making around $100 million. Davis, who may now face an Interpol red notice, denied directly owning or selling the tokens.
Milei has denied actively promoting LIBRA, claiming he only “spread the word” about it. Despite legal challenges, Argentina’s opposition has been unsuccessful in its attempts to impeach him over the scandal.
As the case unfolds, the crypto world is watching closely—because if LIBRA’s creators can get away with this, who’s next?
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