A recent U.S. court decision has reignited discussions around one of crypto's most notorious "rug pulls," the Libra token scandal. A substantial sum of stablecoins, previously frozen in connection with the event, has now been released, granting access to key figures implicated in the controversy.
Unfrozen Funds Spark New Questions
U.S. Judge Jennifer L. Rochon has unblocked $57.6 million in USDC stablecoins, making these funds available to memecoin promoter Hayden Davis and former Meteora CEO Ben Chow. The funds were initially frozen in May as part of a class-action lawsuit filed against Davis, Chow, blockchain infrastructure company KIP Protocol, and KIP co-founder Julian Peh. Despite the ongoing legal proceedings, Judge Rochon ruled that the defendants had not demonstrated "irreparable" harm, noting that sufficient funds remain available to potentially reimburse victims, and no attempts were made to move the frozen assets. This decision comes even as Davis’s motion to dismiss the lawsuit was denied, with the judge expressing significant doubt regarding the ultimate success of the class-action suit against the defendants.
The Aftermath of a Notorious "Rug Pull"
The unfreezing of funds casts a new light on the Libra token scandal, widely regarded as one of the cryptocurrency world's most significant "rug pulls." Launched in February with the stated aim of supporting small businesses in Argentina, the Libra token garnered initial promotion from Argentine President Javier Milei on social media. However, the project collapsed within hours of its launch, trapping investors in what was quickly exposed as a $107 million scheme. While President Milei swiftly distanced himself from the project, denying prior knowledge and retracting his endorsements, the incident triggered a Congressional investigation into his conduct and sparked demands for his impeachment, though that investigation was eventually closed without charges.
