Simply put
- The judge has ordered the release of $57.6 million in USDC related to the Libra meme coin incident.
- This decision comes after the launch of the Libra meme coin in February, which was endorsed by Argentine President Javier Milei and quickly collapsed.
- She expressed skepticism about the plaintiffs’ chances of success against Hayden Davis and Ben Chow.
Libra, known for its controversial reputation, was introduced in February, with President Milei promoting it. A federal judge in Manhattan froze the assets on Tuesday, stating that she no longer believes the defendants are likely to abscond with the funds, particularly as they are cooperating with court proceedings.
This follows the actions of Judge Jennifer L. Locon, who froze the $57.6 million in USDC discovered in June as part of a lawsuit seeking over $100 million in damages. These funds were stored in two wallets under the control of Hayden Davis, CEO of Kelsier Labs LLC and Meteora’s founder.
On Tuesday, Judge Locon mentioned that the defendants have not acted as “evasive actors,” showing compliance with prior legal requirements.
“It’s evident that fund losses could be used to compensate the presumed class,” Judge Locon noted. However, she added, “The plaintiffs haven’t fully shown irreparable harm.”
Consequently, she decided to lift the freeze on the USDC worth $57.6 million. The assets remain in the original frozen wallets, comprising approximately $13.06 million and $44.59 million.
Despite her ruling, the judge admitted her skepticism regarding the potential success of the plaintiff’s case, though she acknowledged that it is still in its early stages.
“This ruling confirms our position all along. This case lacks merit,” stated Davis’s chief attorney, Mazin Sbaiti. “Even with the opportunity to present every piece of evidence, there’s no proof of wrongdoing or any caused loss. Today’s proceedings reveal the true nature of these claims.”
The plaintiffs allege that Davis and Chow misled investors regarding the promotion of the Solana Meme Coin Libra.
Samson Enzer, representing Chow, remarked that the plaintiff’s claims are “unverified and without substance” and expressed eagerness to present arguments in favor of dismissing the case.
The Berwick Act has not yet provided a response to comments.
The legal issues stem from the aftermath of the Libra token, which reached a market capitalization of $1.17 billion before crashing to $33 million in just 24 hours.
Following its introduction, Libra was marketed by President Milei as a fundraising approach for small and medium enterprises in South America.
Interestingly, traders have been noting the uniqueness of the situation, as it echoes events in the Central African Republic where an official meme coin was launched around the same time.
Unlike other tokens, Libra faced immediate backlash, with accusations of insider trading prompting Milei to retract his support, leading to its rapid failure.
As things unraveled, Davis attempted to manage public perceptions, eventually becoming a central figure in the Libra controversy, as investors expressed their frustrations over the collapse.
He maintained that he had lost a substantial amount, stressing his role as an advisor to President Miley during the turmoil.
There were later revelations connecting Davis’s Meteora project to various other meme coins, raising eyebrows amid the ongoing legal battle.
Chow’s departure from Meteora signaled deep concerns about the judgment exercised in trusting Davis.
Allegedly, six months later, both Chow and Davis are working to clear their names amidst the claims against them.
