LIBRA Token Investors Sue Creators Over 94% Collapse

Investors in the LIBRA token have initiated legal action against the creators of the meme coin, alleging that they were misled and suffered significant financial losses. The lawsuit, filed by the well-known crypto law firm Burwick Law, targets Kelsier Ventures, KIP Protocol, and Meteora for their roles in the LIBRA token's launch and subsequent collapse.

The complaint, submitted to the Supreme Court of New York, asserts that the defendants orchestrated an unfair token launch, misleading purchasers and harming retail investors. According to Burwick Law, the creators of LIBRA leveraged the endorsement of Argentine President Javier Milei to create an impression of legitimacy and significant investment value. However, the law firm alleges that the token's launch was deceptive, manipulative, and fundamentally unfair.

One of the key allegations in the lawsuit is the use of a one-sided liquidity pool by KIP and Meteora. This pool was allegedly used to artificially inflate the meme coin's price, allowing insiders to profit while everyday buyers bore the losses. The law firm claims that approximately 85% of the token supply was withheld at launch, enabling insiders to extract stable assets such as USDC and SOL from investors once trading began. Within hours, the defendants' insiders reportedly siphoned approximately $107 million from liquidity pools, causing an immediate 94% collapse in the token's market valuation.

Burwick Law further emphasizes that the defendants did not disclose the true liquidity structures, insider control of token supply, and deliberate mechanisms that allowed insiders to monetize token holdings secretly. This lack of transparency, according to the law firm, deprived investors of material information and contributed to the rapid collapse in the LIBRA Token’s value. The law office believes that this case is crucial in addressing practices that could harm retail purchasers and ensuring that such deceptive tactics are brought to light in court.

Burwick Law is seeking compensation for damages and disgorgement of profits from the defendants on behalf of its clients who were misled by the LIBRA token's creators. The firm represents thousands of clients who have suffered crypto losses and is committed to helping them recover their investments. The lawsuit aims to hold the defendants accountable for their alleged misconduct and to protect the interests of retail investors in the crypto market.