"Judge Unlocks $57M in Libra Funds, Challenging Investor Claims"

A U.S. judge has unfrozen $57.6 million in USDC stablecoins tied to the Libra token scandal, granting access to memecoin promoter Hayden Davis and former CEO of decentralized exchange Meteora, Ben Chow. The decision by Judge Jennifer L. Rochon came after she concluded that the defendants demonstrated sufficient compliance with legal proceedings and posed no immediate threat of dissipating the funds [1]. The assets, previously frozen in May 2025 as part of a class-action lawsuit, remain in their original wallets—$13.06 million in one and $44.59 million in another—without being moved [5].

Rochon noted that the plaintiffs had not demonstrated “irreparable harm” in their case and questioned the likelihood of their success [1]. Despite the court’s denial of Davis’s July motion to dismiss the lawsuit as “moot,” the judge expressed skepticism about the strength of the plaintiffs' claims [1]. Lead counsel for Davis, Mazin Sbaiti, emphasized that the ruling reaffirmed the meritless nature of the case, citing a lack of evidence of wrongdoing or investor losses [5].

The Libra token, promoted by Argentine President Javier Milei in February 2025, initially gained notoriety for its promise to support small businesses in Argentina. However, it soon collapsed, plummeting from a peak market capitalization of $1.17 billion to $33 million within 24 hours [5]. Milei’s initial endorsement of the token triggered a congressional ethics investigation and calls for impeachment, though the probe was later closed without charges [1].

Plaintiffs in the case, represented by Burwick Law, allege that Davis and Chow misled investors by leveraging Milei’s social media promotion to give the token an air of legitimacy. Chow’s legal team has called these claims “untested and meritless,” with plans to pursue a motion to dismiss the lawsuit [5]. The case remains in its early stages, and no further details about potential settlements or trial timelines have been disclosed [1].

The legal developments mark a pivotal moment for the Libra saga, which has already led to broader regulatory scrutiny in the U.S. and internationally. The U.S. Department of Justice and Securities and Exchange Commission have increasingly focused on digital asset fraud and market manipulation, with numerous enforcement actions and policy changes introduced in recent months [2]. The outcome of the Libra case could serve as a precedent for how courts assess liability in digital asset promotions, particularly those involving high-profile endorsements.

The Libra token has since regained some traction in the market, trading at $0.0099 as of the latest data, with a market capitalization of $2.44 million [3]. Its fully diluted valuation stands at $9.52 million, and it has maintained a circulating supply of 256 million tokens [4]. While the token has yet to recover from its initial collapse, its current price trajectory reflects modest gains in recent weeks [4].

The broader regulatory landscape for digital assets continues to evolve, with the SEC, DOJ, and other agencies issuing guidance and enforcement actions to address risks in the crypto space. For instance, the SEC recently clarified its stance on stablecoins, stating that certain reserve-backed stablecoins are not securities [2]. Meanwhile, the DOJ has shifted its enforcement priorities to focus on fraud and criminal misuse of digital assets rather than imposing regulatory frameworks through litigation [2]. These developments signal a growing emphasis on investor protection and market integrity in the digital asset sector.

Source:

[1] Judge unfreezes over $57M in stablecoins linked to Libra ... (https://cointelegraph.com/news/judge-unfreezes-over-57m-stablecoins-libra-token-scandal)

[2] Digital Assets Hub (https://www.gibsondunn.com/digital-assets-hub/)

[3] LIBRA Live Price Chart, Market Cap & News Today (https://www.coingecko.com/en/coins/libra-3)

[4] LIBRA Price, LIBRA Price, Live Charts, and Marketcap (https://www.coinbase.com/price/libra-3)

[5] Libra Promoters Regain Access to $57.6 Million in Crypto After ... (https://finance.yahoo.com/news/libra-promoters-regain-access-57-191944299.html)