Victims of the ‘$LIBRA’ cryptocurrency scam, which had the support of President Javier Milei, have filed a class-action lawsuit with the New York State Supreme Court.
Burwick Law, a law firm representing multiple clients that specialises in cryptocurrency litigation, confirmed the suit had been filed on Tuesday.
In the suit, plaintiffs allege that the promoters of the cryptocurrency “Kelsier, KIP, Meteora and related parties orchestrated an unfair token launch [$LIBRA], allegedly misleading purchasers and harming retail investors.”
The launch took place in a “deceptive, manipulative and fundamentally unfair” manner, it added.
Milei was not named as a defendant, though the complaint mentions his role in the launch.
The head of state promoted the token as a way to stimulate innovation and private-sector investment in Argentina and support his administration, but $LIBRA’s rapid rise and collapse ended in scandal.
The cryptocurrency’s promoters “leveraged the President’s high-profile support” and “intentionally cultivated a veneer of legitimacy and a false assurance of the token’s economic potential,” according to the complaint filed by New York state resident Omar Hurlock on behalf of himself and “others similarly situated.”
The New York law firm further alleges that the promoters “used one-sided liquidity pools to artificially inflate the price of $LIBRA,” rapidly siphoning off approximately US$107 million and causing a 94-percent crash in its market value.
“They retained approximately 85 percent of the supply at launch, allowing insiders to profit, while regular buyers suffered the losses,” the filing notes, before criticising “predatory infrastructure techniques.”
According to Observatorio del Derecho de la Ciudad, an Argentine social organisation, the cryptocurrency’s disastrous launch saw more than 40,000 people lose a cumulative US$4 billion.
One of those affected was Hurlock, who bought the cryptocurrency “and as a result suffered damages,” reads the lawsuit.
Milei, though not named in the NY suit, is potentially facing legal trouble at home. The federal courts have centralised a number of criminal complaints and will investigate whether the head of state broke the law, engaging in alleged fraud, influence-trafficking and violating public ethics laws.
He has since distanced himself from the memecoin, arguing he didn’t formally promote $LIBRA and only “shared” information about it.
Nevertheless, the President’s statements were “designed to create confidence in purchasers,” the lawsuit claims, denouncing the promotion as ”false or misleading.”
“Nearly 90 percent of the token was captured by the team or insiders at the time of launch, and used by those close to the project to enrich themselves at the expense of retail purchasers and the Argentine people,” the lawyers note.
The lawsuit has been filed with the Supreme Court of the State of New York, where the Meteora firm is legally based. It also names companies including Kelsier Ventures and KIP Protocol and Meteora.
Individuals Hayden Davis (CEO of Kelsier), his brother Gideon Davis (COO of Kelsier), his father Thomas Davies (president of Kelsier), Julian Peh (Founder and CEO of Kip Protocol) and Benjamin Chow (founder and CEO of Meteora) are also named.
– TIMES/AFP