LIBRA Co-Founder Seeks Dismissal of $100 Million Fraud Lawsuit

Hayden Davis, the co-founder of Kelsier Ventures behind the LIBRA cryptocurrency, has filed a motion in a federal court in New York to dismiss a class-action lawsuit brought against him. The lawsuit alleges that Davis misled buyers and siphoned over $100 million from the project, which was purportedly designed to support Argentina's economy.

Davis's legal team argues that the court lacks jurisdiction over the case, as Davis does not reside in New York, does not conduct business there, and was not physically present in the state when the alleged misconduct occurred. The filing also states that Davis did not specifically target the New York market with the global offering of LIBRA meme coins.

In his defense, Davis emphasized that the LIBRA project was initiated in Argentina and was available to buyers worldwide, not marketed to any specific jurisdiction. He also described the project's website as "passive," claiming it only collected applications from businesses in Argentina and did not transmit goods or services to users in other states.

The plaintiffs, however, contend that Davis, along with his brothers Gideon and Thomas, who are also co-founders of Kelsier Ventures, created LIBRA with the false promise of boosting Argentina's economy. They allege that the true intent was to drain money from one-sided liquidity pools and transfer over $100 million to wallets controlled by the Davis family and their associates. The lawsuit also accuses Davis of making public statements to build trust around the token, including a promise to repurchase certain LIBRA tokens to support their value.

Davis countered these allegations by stating that his statements were not directed specifically at New York residents and that he was not physically present in New York when he made them. In May, the plaintiffs obtained a temporary court order requiring Circle, the issuer of the USDC stablecoin, to freeze approximately $57.65 million in assets allegedly linked to the LIBRA project. At its peak, LIBRA had a market cap of $4.6 billion before crashing by 94%, leaving thousands of investors in the red.

The class-action lawsuit also names other entities believed to be connected to the LIBRA operation, including blockchain company KIP Protocol and its CEO Julian Peh, and crypto platform Meteora, alongside its co-founder Benjamin Chow.

In related developments, blockchain forensics expert Fernando Molina testified before Congress about large transfers from wallets linked to Davis. Molina highlighted several transactions timed around key points in the LIBRA scandal and its political ties in Argentina. On January 30, the same day Davis met with Argentine President Javier Milei at the Casa Rosada, Davis transferred $507,500 via the Bitget exchange just 40 minutes after Milei posted a photo with Davis on X. Another suspicious transaction occurred on February 13, a day before LIBRA’s launch, when Davis sent $1.275 million to an exchange platform he does not usually use. On February 3, Davis made another large transaction of $1.991 million to a different wallet. The following day, trader Mauricio Novelli, supposedly Davis’s connection to Milei, opened two safe deposit boxes at Banco Galicia’s Martínez branch, which were later emptied by his mother and sister.