- LIBRA token developers allegedly withheld supply and manipulated liquidity, causing retail traders to lose millions amid a 94% price collapse.
- The lawsuit claims insiders secretly extracted over $100 million in stable assets before the token’s public launch on Solana.
- The political fallout has intensified as calls grow for President Milei’s impeachment due to his public support of the LIBRA token project.
Burwick Law has initiated a class action lawsuit in New York targeting Kelsier Ventures, KIP Protocol, and Meteora. The filing, made on March 18, accuses the firms of orchestrating a deceptive launch of the LIBRA token.
According to court documents, developers allegedly manipulated the token’s liquidity to mislead traders and gain substantial profits during its initial market debut.
False Promotion and Liquidity Control Alleged
The lawsuit outlines how LIBRA was promoted as a digital asset aimed at supporting Argentina’s economy. It even received public backing from President Javier Milei. However, legal filings suggest that developers inflated the token’s price by using a one-sided liquidity pool. This method allowed them to maintain artificial price levels while keeping 85 percent of the token’s total supply away from public circulation.
As trading opened, insiders reportedly withdrew over $107 million in value, which triggered a 94 percent price drop. The complaint claims this setup enabled internal actors to quietly move stable assets out of the system. Nearly 75,000 traders faced significant losses during this event, which has become widely referred to as “Cryptogate.”
Pre-Launch Access and Investor Losses
Investigations revealed that Kelsier Ventures and other connected entities accessed LIBRA tokens before the public launch. Reports state these groups earned over $100 million through early trades and selective liquidity strategies. Consequently, this insider advantage contributed to a loss of more than $280 million in market value shortly after the token’s launch on Solana on February 14.
Beyond the financial damages, the matter has escalated to criminal and political domains. Argentine attorney Gregorio Dalbón requested an Interpol Red Notice on March 12 for Hayden Davis, CEO of Kelsier Ventures. He cited Davis’s financial resources as a risk for potential flight. Additionally, political opposition in Argentina is calling for President Milei’s impeachment, arguing that his endorsement of the project aligned him with alleged fraudulent activity.
