A U.S. federal judge lifted the freeze on $57.5 million from Hayden Davis and Ben Chao, founders of the Libra project, causing the price of the memecoin to rise briefly. Judge Rochon warned that the lawsuit against the two men could completely fail.
Although all details have not yet been revealed, the response from the cryptocurrency community has been disappointing. Since President Milei disbanded the task force assigned to investigate him, none of the memecoin promoters have faced severe consequences.
A big surprise in the demand for Libra coin
A few months ago, the LIBRA memecoin became a massive scandal in Argentina, with President Milei and several cabinet members embroiled in fraud allegations.
In comparison, the lawsuit filed by Burwick Law against two promoters, Hayden Davis and Ben Chao, was merely a side event, but an unexpected development occurred.
According to court reports, a U.S. federal judge lifted the asset freeze on the promoters of the memecoin, leading to chaos in the Libra case.
In May, the class action lawsuit filed by Burwick Law escalated to a federal case, and the courts froze $57.5 million of U.S. debt funds. Davis and Chao will now regain access to these funds.
Describing this as unexpected is an understatement. Ben Chao was forced to resign from Meteora due to the scandal, and global arrest warrants targeted Hayden Davis. However, Judge Jennifer L. Rochon warned that the Burwick lawsuit could completely fail.
This briefly increased the value of the balance, but it quickly fell again.
"Crime has become legal now" and outrage floods the cryptocurrency community
This case is still ongoing, but there are some factors that might explain this setback. The Libra scandal shocked the cryptocurrency community in Argentina, causing immense institutional pressure, but President Milei seemingly evaded the consequences.
Compared to this effort, the class action lawsuit filed by Burwick was relatively small. So why is it assumed to succeed while the Argentine judicial system has apparently failed?
However, the cryptocurrency community remains discontent, particularly in light of the conviction of Roman Storm. The phrase "crime has become legal now" resonated among observers in shock.
In other words, the Libra scandal may end without any real consequences for any of the wrongdoers. The battle is not over yet, and more significant details may emerge.
However, incidents like this may contribute to entrenching a culture of pessimism within the cryptocurrency community. This pessimism could negatively affect future investments, especially regarding memecoins.