"Judge Unlocks $4.7M in Tokens, Raising Questions About Meme Coin Accountability"

On August 19, 2025, U.S. District Judge Jennifer L. Rochon dismissed a request to freeze the assets of Hayden Davis, co-founder of the $LIBRA token, thereby lifting a temporary restraining order (TRO) that had restricted access to approximately 500 million LIBRA tokens and $58 million in USDC. The order had been issued in April 2025 by plaintiffs Omar Hurlock and Anuj Mehta, who claimed to represent a putative class action of investors who lost funds following the token’s collapse in February 2025. Judge Rochon stated she was “extremely skeptical” of the plaintiffs’ likelihood of success on the merits of their claims [1].

The $LIBRA token, launched on the Solana-based decentralized exchange Meteora, initially saw its market cap surge into the billions following a promotional endorsement by Argentinian President Javier Milei. However, the token’s value collapsed after allegations emerged that Davis had executed a “rug pull” scamming investors out of over $280 million in assets deposited into the liquidity pool. The plaintiffs argued that Davis and co-founder Ben Chow had engaged in fraudulent activity, warranting a broad asset freeze. Judge Rochon rejected this motion, noting that plaintiffs had not met their burden to justify the sweeping injunction [1].

Following the court’s decision, Davis is now permitted to transfer 20.8 million LIBRA tokens each month, with the total of 500 million tokens valued at approximately $4.7 million at the time of the ruling. While the TRO has been dissolved, the USDC portion remains technically frozen. Senior Data Engineer at Blockworks, Fernando Molina, highlighted that the ruling allows Davis greater financial flexibility while the legal proceedings continue [3].

This development has broader implications for meme coins and the legal framework surrounding them. The U.S. Securities and Exchange Commission (SEC) has consistently maintained that meme coins lack utility beyond entertainment and are not subject to regulatory oversight. The ruling appears to align with this stance, emphasizing the speculative nature of such tokens and the high barriers for plaintiffs to prove material harm [2].

In parallel, legal and public relations efforts are unfolding in Argentina. Davis has reportedly offered an Argentinian judge a $100 million wire transfer from the profits of the token launch to demonstrate his good faith and innocence. Additionally, an Argentinian developer, Maximiliano Firtman, has suggested that Davis could use the tokens to support the “Viva La Libertad” project, which was briefly promoted by President Milei. This could provide further legitimacy to the token’s original purpose of supporting small businesses [3].

The legal battle remains active, with both sides preparing for further litigation. Sbaiti & Company PLLC, representing Davis, emphasized that the ruling confirms the plaintiffs’ case is without merit. Meanwhile, Burwick Law, the firm leading the class action in the U.S., has hinted at the possibility of a settlement involving the transfer of tokens to the Viva La Libertad account. This potential resolution could influence both the legal and public perception of the case [2].

Source:

[1] Cahill Defeats Plaintiffs' Bid to Freeze Assets in High-Profile Libra Gate Class Action (https://www.cahill.com/news/firm-news/2025-08-19-cahill-defeats-plaintiffs-bid-to-freeze-assets-in-high-profile-libra-gate-class-action)

[2] Federal Court Denies Injunction Against Hayden Davis in $ ... (https://agilitypr.news/Federal-Court-Denies-Injunction-Against--1002011)

[3] US Judge Drops Hayden Davis Freezing Order, Frees Up 500M LIBRA Tokens (https://protos.com/us-judge-drops-hayden-davis-freezing-order-frees-up-500m-libra-tokens/)