LIBRA Memecoin Creators Sued for 94% Price Plunge, $107M Loss

Burwick Law has initiated legal action against the creators of the LIBRA memecoin, alleging a deceptive token launch that misled investors and resulted in significant financial losses. The lawsuit, filed in the Supreme Court of New York, targets Kelsier Ventures, KIP Protocol, and Meteora, accusing them of orchestrating an unfair token launch that artificially inflated the price of LIBRA and allowed insiders to profit at the expense of retail investors.

The lawsuit claims that the defendants used a one-sided liquidity pool to manipulate the token's price, enabling insiders to drain approximately $107 million from the pools within hours. This manipulation caused LIBRA’s value to plummet by 94%, leaving many investors with substantial losses. The lawsuit also alleges that the companies behind LIBRA used the influence of Argentine President Javier Milei to promote the token, creating a false sense of legitimacy and misleading investors about its potential.

Burwick Law is seeking financial compensation for damages, punishment for wrongdoing, the return of profits made unfairly, and a court order to prevent future fraud in token offerings. The law firm's allegations are supported by a blockchain research firm, which found that more than 86% of the largest 15,430 Libra wallets sold at a loss, totaling $251 million. Only a small fraction of wallets made a profit, totaling $180 million.

Kelsier Ventures and its CEO, Hayden Davis, are among the biggest beneficiaries of the alleged scheme, having made around $100 million. Davis has denied direct ownership or sale of the tokens, but the lawsuit suggests otherwise. The legal action against the LIBRA memecoin creators highlights the risks and potential for fraud in the cryptocurrency market, particularly in the realm of memecoins, which often rely on hype and speculation rather than fundamental value.

The case is significant as it could set a precedent for how crypto projects handle investors’ money and the legal consequences of deceptive token launches. The outcome of the lawsuit will be closely watched by the cryptocurrency community and could have broader implications for the regulation and oversight of digital assets.