{"id":9898,"date":"2025-03-18T08:10:46","date_gmt":"2025-03-18T07:10:46","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=9898"},"modified":"2025-03-18T08:10:46","modified_gmt":"2025-03-18T07:10:46","slug":"libra-memecoin-creators-draw-legal-action-as-defendants-in-u-s-class-action-lawsuit","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/03\/18\/libra-memecoin-creators-draw-legal-action-as-defendants-in-u-s-class-action-lawsuit\/","title":{"rendered":"LIBRA Memecoin Creators Draw Legal Action as Defendants in U.S. Class-Action Lawsuit"},"content":{"rendered":"

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Update March 18, 6:42am: This article has been revised to indicate that Cointelegraph contacted KIP Protocol and Meteora.<\/em><\/p>\n

The Libra token controversy is poised to be examined by the Supreme Court of New York after a recently submitted class-action lawsuit charged its developers with deceiving investors and extracting over $100 million from unilateral liquidity pools.<\/p>\n

Burwick Law initiated the lawsuit on behalf of its clients against Kelsier Ventures, KIP Protocol, and Meteora on March 17 for releasing the Libra (LIBRA) token in a \u201cmisleading, manipulative, and intrinsically unjust\u201d manner. The token was subsequently endorsed by Argentine President Javier Milei on X as a fiscal initiative aimed at boosting private-sector investment in the nation.<\/p>\n

The law firm criticized the two cryptocurrency infrastructure and launchpad entities endorsing LIBRA \u2014 KIP and Meteora \u2014 asserting that they employed a \u201cpredatory\u201d unilateral liquidity pool to artificially drive up the memecoin\u2019s valuation, enabling insiders to gain profits<\/a> while \u201cordinary purchasers suffered the losses.\u201d<\/p>\n

In a matter of hours, the insiders \u201cquickly extracted approximately $107 million from the liquidity pools,\u201d leading to a 94% decline in LIBRA\u2019s market valuation, Burwick Law stated<\/a> in a March 17 filing made public on X.<\/p>\n

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Source: <\/em>Burwick Law<\/em><\/a><\/p>\n<\/figcaption><\/figure>\n

President Milei<\/a> was referenced in the lawsuit but was not listed as a defendant.<\/p>\n

Burwick accused the defendants of exploiting Milei\u2019s influence to fervently advocate for the token, intentionally manufacturing a false impression of legitimacy and misguiding investors about its economic viability.<\/p>\n

Nearly 85% of LIBRA\u2019s tokens were withheld at the time of launch, and the \u201cpredatory infrastructure strategies\u201d allegedly utilized by the defendants were not disclosed to investors, according to Burwick.<\/p>\n

\u201cThese strategies, coupled with oversight regarding the true liquidity frameworks, deprived investors of significant information.\u201d<\/p><\/blockquote>\n

Burwick is pursuing compensatory and punitive damages, the recovery of \u201cunjustly acquired\u201d profits, and injunctive relief to prevent further fraudulent token ventures.<\/a><\/p>\n

Cointelegraph contacted KIP Protocol and Meteora but did not receive an immediate reply.<\/p>\n

Related: <\/strong><\/em>Law firm demands Pump.fun eliminate over 200 memecoins utilizing its IP<\/strong><\/em><\/a><\/p>\n

Data from blockchain analytics firm Nansen revealed that of the 15,430 largest Libra wallets it assessed, over 86% of those were sold at a loss,<\/a> accumulating $251 million in losses.<\/p>\n

Only 2,101 profitable wallets managed to secure a combined $180 million in profit, noted Nansen in a Feb. 19 report.<\/p>\n

The venture capital firm associated with the LIBRA token, Kelsier Ventures, and its CEO, Hayden Davis, appeared to be among the largest beneficiaries<\/a> from the token’s launch. They assert<\/a> to have gained approximately $100 million.<\/p>\n

Davis, who is now facing a possible Interpol red notice<\/a> following a request from an Argentine attorney, stated on Feb. 17 that he did not directly hold the tokens and would not sell them.<\/p>\n

Meanwhile, Milei has distanced himself from the memecoin, contending he did not \u201cendorse\u201d the LIBRA token \u2014 contrary to fraud allegations<\/a> raised against him \u2014 and instead simply \u201cshared the information\u201d about it.<\/p>\n

Argentina\u2019s opposition faction has called for Milei\u2019s impeachment<\/a> but has experienced limited success thus far.<\/p>\n

Magazine: <\/strong><\/em>Introducing attorney Max Burwick \u2014 \u2018The ambulance chaser of crypto\u2019<\/strong><\/em><\/a><\/p>\n