Burwick Law has filed a class action lawsuit in New York against Kelsier Ventures, KIP Protocol, and Meteora, accusing them of conducting a fraudulent token launch that misled investors and manipulated liquidity in the LIBRA token scandal.
Allegations of Market Manipulation
According to the March 18 lawsuit, the developers of LIBRA allegedly manipulated liquidity to defraud retail traders of millions of dollars, while presenting false promises to investors. The token was initially marketed as a project to boost Argentina’s economy, even securing endorsement from President Javier Milei.
However, court documents claim that the token’s developers artificially inflated prices by using a one-sided liquidity pool, rather than conducting a fair launch. Additionally, the lawsuit alleges that 85% of the token supply was withheld, allowing insiders to withdraw $107 million when trading began—causing a 94% price collapse.
“Insiders discreetly and systematically extracted stable assets from unsuspecting buyers.” — Burwick Law court filing
Legal and Political Ramifications
Beyond seeking restitution for affected investors, Burwick Law aims to prevent similar fraudulent launches in the future. Meanwhile, legal actions are mounting:
- On March 12, Argentine attorney Gregorio Dalbón requested an Interpol Red Notice for Hayden Davis, the CEO of Kelsier Ventures, claiming Davis’ wealth could allow him to evade prosecution.
- A Red Notice is an Interpol alert requesting global law enforcement to locate and provisionally arrest a person pending extradition.
The LIBRA Token Collapse
The LIBRA token, launched on Solana (SOL) on February 14, quickly surged to a $4.4 billion market cap before crashing, erasing over $280 million in value across nearly 75,000 traders. The scandal—nicknamed “Cryptogate”—has triggered multiple allegations of insider trading and market manipulation.
A March 14 report by Crypto.news indicated that insiders, including Kelsier Ventures, gained early access to LIBRA tokens, making over $100 million through pre-launch trades and liquidity control.
Political Fallout in Argentina
The LIBRA scandal has also sparked political controversy in Argentina. Opposition leaders have called for President Javier Milei’s impeachment, citing allegations of fraud linked to the project. Analysts believe the controversy could damage Milei’s political reputation, particularly as Argentina approaches midterm elections later this year.
Looking Ahead
With legal and political pressure mounting, the outcome of the class action lawsuit against Kelsier Ventures, KIP Protocol, and Meteora could set a precedent for holding crypto projects accountable. As investigations continue, regulators and investors will be closely watching the case’s impact on market integrity and investor protections in the cryptocurrency space.
