On Tuesday, assets associated with the infamous Libra token were unfrozen at the behest of a Manhattan federal judge who refused to tag the defendants “evasive actors” because they have been on their best behavior.
U.S. District Judge Jennifer L. Rochon froze $57.6 million worth of USDC in June as part of a case in which the plaintiffs are seeking over $100 million in damages.
Why did the judge lift the freeze requirement?
The frozen assets were in two wallets controlled by defendants Hayden Davis, CEO of venture capital firm Kelsier Labs LLC, and Ben Chow, founder of decentralized exchange Meteora. Rochon claims both of them have been compliant with the court proceedings so far.
That compliance is ultimately why she decided to lift the freeze requirement on the $57.6 million worth of USDC on Tuesday. However, as she did so, she also expressed skepticism about the likelihood of the plaintiffs, who are represented by Burwick Law , succeeding in their case even though it is still in an early phase.
The plaintiffs claim that Davis and Chow misled investors by promoting the Libra Solana meme coin (LIBRA) with the social media post from President Milei in a bid to make the token look legit.
Chow’s lawyer, Samson Enzer of Cahill Gordon & Reindel LLP, has denied the plaintiffs’ claims, tagging them “untested and meritless.”
Hayden Davis and Ben Chow are trying to clear their names
The legal battle is unfolding months after the scandal of the LIBRA token, which surged to a $1.17 billion market capitalization before crashing down 97% to $33 million within 24 hours.
Upon launch, LIBRA was touted by Argentine President Javier Milei as a funding tool for small businesses in the South American country, encouraging many traders to ape in.
There was little reason to believe it was a scam, as around that time, the Central African Republic launched a national meme coin, and the President of the United States created his own official meme coin.
Unfortunately, the story they sold was a lie as Libra wasn’t the official token of Argentina, and allegations of insider trading started to circulate, prompting Milei to delete his post, and it all went downhill from there.
Davis attempted some damage control, even going on a media campaign to explain what had happened. It was a mistake as he soon became the face of the Libra scandal, with many investors pointing fingers at him for the collapse.
Davis presented himself as President Milei’s advisor, claiming his role with Libra was to act as a custodian of the associated funds—a role that left him bag holding $100 million.
Chow of Meteora was implicated because he referred a “handful” of projects to Davis’ Kelsier Labs, including First Lady Melania Trump’s official meme coin. Meteora’s infrastructure was also used to launch Libra.
The scandal led to Chow’s exit from Meteora. Six months later, both are still trying to clear their names. While they do that, Milei continues to distance himself from the scandal.
In May, Milei dissolved a task force investigating his role in the controversial Libra meme coin launch. According to documents published on the government’s website, the task force completed its investigation even though it did not reveal the details of its findings to the public.
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