Lawsuit has been filed in the New York Supreme Court against the LIBRA token’s creators

What’s new? The law firm Burwick Law has filed a class action lawsuit in the New York Supreme Court against Kelsier Ventures, KIP Protocol, and Meteora over the unfair launch of the LIBRA token that harmed retail investors. The plaintiffs allege that 85% of the token’s supply was withheld at launch, allowing insiders to profit while regular buyers suffered losses.

Source: X.com

What else is known? It is also alleged that infrastructure platforms KIP and Meteora used a “predatory” one-sided liquidity pool to artificially inflate the price of LIBRA, allowing insiders to profit while regular buyers suffered losses.

Argentine President Javier Milei promoted LIBRA in his X-account after the launch, saying the project was designed to stimulate private-sector financing in the country.

The lawsuit says that within hours of the launch, insiders siphoned off about $107 million from liquidity pools, causing LIBRA’s market value to plummet 94%.

Burwick accused the defendants of aggressively promoting the token using Milei’s influence, creating a false sense of legitimacy, and misleading investors about its economic potential. Although the Argentine president was mentioned in the lawsuit, he is not named as a defendant.

Burwick is seeking the forfeiture of unfairly obtained profits, compensatory, and punitive damages, and an injunction for the defendants from conducting new token launches.

According to blockchain analytics platform Nansen, of the 15 430 largest LIBRA wallets, more than 86% made sales at a loss, which totaled $251 million. Only 2101 wallets were able to turn a profit totaling $180 million.

Venture capital firm Kelsier Ventures and its CEO Hayden Davis were probably the biggest beneficiaries of the launch. They claim to have made about $100 million.

Argentine prosecutor’s office demanded the freezing of assets of the LIBRA token team for $110 million

Law enforcers believe that President Javier Milei is involved in the fraudulent asset scheme

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Davis, who now faces a potential Interpol red notice at the request of Argentine prosecutors, said on February 17 that he does not own the tokens directly and will not sell them.

Milei distanced himself from the token, saying he was not promoting the asset, as alleged in the fraud lawsuits against him, but merely “spread the word” about it. The opposition has called for Milei’s impeachment but has so far been unsuccessful.