Court halts $57.65 million worth of USDC tied to Kelsier Ventures due to LIBRA token case
A U.S. federal court has initiated a significant move in the ongoing class-action lawsuit targeting alleged fraud regarding the LIBRA meme coin by ordering the freezing of approximately $57.65 million in USDC. The freeze was implemented on May 28 via a Temporary Restraining Order (TRO) issued by the Southern District of New York, affecting two Solana-based wallets associated with Kelsier Ventures - the firm behind LIBRA's controversial launch.
The legal action was instigated by Burwick Law, which represents investors who allege they were misled by LIBRA's promoters. The lawsuit, filed on March 17, names Kelsier Ventures' co-founders Gideon, Thomas, and Hayden Davis, as well as Julian Peh of KIP Protocol and Benjamin Chow of Meteora. The plaintiffs allege the team orchestrated a deceptive scheme that lured retail investors into one-sided liquidity pools, resulting in significant financial losses.
The wallets in question, containing over $44 million and $13 million respectively, were frozen using Circle's infrastructure following the court's order. A hearing on June 9 will determine whether the freeze remains in place throughout the case.
The ruling could set an important precedent for asset protection in cryptocurrency-related lawsuits, signaling stricter oversight for hype-driven token launches. It may further contribute to a clearer legal framework for handling such fraud cases, potentially protecting investors and fostering a more stable and regulated cryptocurrency market.
Meanwhile, the brief surge and subsequent plummet of LIBRA's market cap in February, following a public endorsement by Argentine President Javier Milei, has raised questions about the reliability of meme coins and unregulated cryptocurrency projects. Milei later deleted his social media posts, and a national task force set up to investigate the incident was dissolved on May 19.
Although not directly relevant to the current lawsuit, these developments highlight the importance of investor awareness and the need for transparency and accountability in the crypto market.
The legal action against Kelsier Ventures, initiated by Burwick Law, involves allegations of misleading investors and financial losses resulting from a deceptive scheme involving one-sided liquidity pools. This lawsuit has led to the freezing of approximately $44 million and $13 million in crypto wallets affiliated with Kelsier Ventures, utilizing Circle's infrastructure, as part of the financial aspect of this business dispute.
The potential outcomes of this class-action lawsuit, including its influence on asset protection in cryptocurrency-related lawsuits and the development of a clearer legal framework for handling fraud cases in the crypto market, may foster a more stable and regulated business environment for cryptocurrencies.
