A U.S. judge unblocked $57.6 million in USDC stablecoins related to the February Libra token scandal, allowing memecoin promoter Hayden Davis and former Meteora decentralized exchange CEO Ben Zhou to access these funds.
Judge Jennifer L. Rochon froze these funds in May as part of a class action lawsuit against Davis, Zhou, blockchain infrastructure company KIP Protocol, and its co-founder Julian Pei.
According to Law360, the judge found that the defendants failed to demonstrate 'irreparable' harm, as the funds to compensate the victims still existed, and the defendants did not attempt to transfer the frozen funds.
In July, Davis filed to dismiss the lawsuit against him, but the court dismissed it as 'invalid.' However, Rochon indicated that she doubts the class action against Davis, Zhou, and others would succeed.
The Libra token scandal is considered one of the largest frauds in history, attracting Argentina's President Javier Milei and triggering an ethical investigation against him as well as a class action lawsuit from investors.
The Libra token scandal and its impact on the crypto world
The Libra token was launched in February, claiming to support small businesses in Argentina, and was initially promoted by Milei on social media.
Libra collapsed within hours of its launch, triggering a strong backlash from investors, with the incident described as a $107 million fraud.
Milei distanced himself from the token, denying knowledge of the project's fundamentals and retreated from the initial promotional activities.
Milei issued a statement saying he has no connection to the project.
Despite this, Milei closed the investigation against him and disbanded the special committee, finding no improper accusations against the presidential office, leading to allegations of political cover-up.
