A U.S. federal judge in Manhattan unexpectedly eased the pressure on defendants in the case of the notorious meme coin Libra (LIBRA) on Tuesday. The court decided to release $57.6 million in USDC that had been frozen since June following a lawsuit from investors demanding more than $100 million in damages.

Judge Questions Strength of Allegations

The decision came from Judge Jennifer L. Rochon, who had previously ordered the asset freeze. This time, however, she acknowledged that Hayden Davis, CEO of Kelsier Labs, and Ben Chow, founder of the Meteora exchange, had fully complied with legal proceedings and showed no signs of evasive behavior.

Their cooperation ultimately led her to lift the freeze order. At the same time, she expressed skepticism about whether the plaintiffs’ claims are strong enough to prevail in court, noting the case remains in an early stage.

Accusations of Manipulation and False Legitimacy

The plaintiffs, represented by Burwick Law, argue that the two misled investors by presenting Libra Solana (LIBRA) as an official and trustworthy project. They allege Davis and Chow exploited social media, particularly a post by Argentine President Javier Milei, to make the token appear legitimate.

Chow’s attorney, Samson Enzer of Cahill Gordon & Reindel LLP, rejected the allegations as “unverified and baseless.”

From Billion-Dollar Market Cap to Collapse in 24 Hours

The case stems from last year’s scandal, when Libra’s market capitalization soared to $1.17 billion, only to crash by 97% within 24 hours, falling to just $33 million.

At the time, Milei publicly promoted the token as a tool to finance small businesses in Argentina. Investor enthusiasm was further fueled by the fact that other states were launching official meme coins around the same period – such as the Central African Republic and even the United States.

But it soon became clear that Libra had no official backing, and accusations of insider trading and market manipulation emerged. President Milei quickly deleted his post and distanced himself from the project.

Davis and Chow on the Defensive

After the collapse, Davis launched a media campaign in an attempt to salvage Libra’s reputation. Instead, he became the face of the scandal. He claimed he acted as a fund manager tied to Libra, a role that left him with assets worth $100 million.

Chow, whose Meteora infrastructure was used in the token’s launch, was accused of supporting Davis’s projects – including the official meme coin of First Lady Melanie Trump. The controversy eventually forced him to step down from Meteora’s leadership.

Political Fallout in Argentina

Meanwhile, President Milei has sought to distance himself as much as possible. In May, he dissolved the task force investigating his role in Libra’s launch. Documents confirmed the probe was closed, though no details of its findings were made public.

Six months after Libra’s crash, the saga remains unresolved – with Davis and Chow fighting to clear their names, while investors face the growing possibility that compensation may never materialize.

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