Despite issuing statements and denying involvement in the Libra meme coin scandal, a law firm has finally sued KIP Protocol for its alleged role in the project’s launch.
According to an official post on X, Burwick Law filed a class-action lawsuit in the New York Supreme Court on March 17 against KIP Protocol, Meteora, and Kelsier Ventures for launching the Libra meme coin.
KIP Protocol Denies Involvement
On February 24, KIP Protocol issued a press statement saying the firm neither initiated nor directed any of the activities associated with the Libra meme con scandal and alleged that they were merely invited to help manage a different financial initiative for Argentine SMEs. The statement by the KIP Protocol read:
“KIP was invited to assist in managing the project’s financing initiative for Argentinian SMEs. This invitation was made by Mauricio Novelli only on February 13, 2025, based on our experience in running grant programs and our ability to deploy AI infrastructure for companies.”
Accusations of Insider Trading
However, the law firm has blamed KIP and Meteora, renowned crypto infrastructure and LaunchPad firms, which it claims employed a predatory one-sided liquidity pool to propagate the Libra meme coin scandal that allowed insiders to make huge profits. At the same time, ordinary users were left licking their wounds. According to the court filing, the insiders:
“Rapidly siphoned approximately $107 million from the liquidity pools,” causing a 94% crash in LIBRA’s market value […] in a deceptive, manipulative and fundamentally unfair manner.”
The Libra meme coin scandal emerged on February 15, 2025, following the token’s launch and a significant endorsement from Argentina President Javier Milei, who shared a link to the project on his X handle. The President’s apparent endorsement through a later deleted statement saw the token’s price jump from $0.34 to $0.75 within hours. As President Milei deleted his post, widespread speculation arose about the project being a scam.
Red Flags are Visible
Investigations into the project raised a number of red flags, including the Libra official website, which was created only an hour before the launch despite the domain having been registered at least a year earlier. Moreover, Libra co-founder Hayden Davis admitted in a YouTube interview that he and his team had manipulated the token’s launch by “sniping our coin.”
The Libra meme coin scandal has been so widespread it has concentrated on Meteora, a decentralized exchange built on Solana. According to data, at least 72.5% of LIBRA’s total trading volume, amounting to $116.5 million, has occurred on the Solana platform. Meteora co-founder Ben Chow also attempted to distance himself from the saga, but when the heat became too much, he resigned from his position at Meteora. However, his colleagues continued to defend his character, stating there was no evidence of financial misconduct.
Conclusion
The two firms have continuously denied taking any profits or payments associated with the Libra meme coin scandal. Moreover, the firms have also denied that any of their wallets were involved in the launch and that they did not have any connection with Argentine President Javier Milei. Meanwhile, Milei himself has distanced himself from the Libra meme coin scandal, which could lead to his impeachment.
Frequently Asked Questions (FAQs)
Is the Libra meme coin associated with the Argentine government?
No, but one of its promoters allegedly paid Karina Milei, the President’s sister, for endorsements, creating a perceived connection.
How did the promoters allegedly manipulate the market?
Reports indicate that the promoters accumulated tokens early and sold them in coordinated dumps, causing the price to crash while they profited.
What are the lessons to be picked from the Libra meme coin scandal?
Watch out for political endorsements, check pre-launch wallet distributions, and be skeptical of coins with sudden influencer hype.
How has the scandal affected Argentine President Javier Milei?
Argentine President Javier Milei is facing a corruption probe into his promotion of a meme coin, a highly speculative form of cryptocurrency, and there is talk of impeaching him.
Appendix: Glossary of Key Terms
Meme coin: An altcoin named after trends, humorous or fun topics, or anything else someone can think of.
Liquidity pool: A collection of cryptocurrency tokens locked in a smart contract, facilitating trades on decentralized exchanges and enabling users to earn rewards by providing liquidity.
Insider trading: The illegal practice of trading assets to one’s advantage through having access to confidential information.
References
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