The United States Freezes $280 Million From the $LIBRA Crypto Scandal and Targets Hayden Davis, While Milei is Excluded From the Lawsuit
On February 14, 2025, Argentine President Javier Milei posted a tweet promoting the cryptocurrency $LIBRA, presenting it as a private project to boost the Argentine economy. The post was deleted hours later.
The token’s value skyrocketed, reaching a market capitalization of $4 billion, only to collapse by 94% within hours, leaving thousands of investors with substantial losses.
The U.S. Justice Department, in a ruling issued by Judge Jennifer L. Rochon of the Southern District Court of New York, froze $280 million in profits related to this alleged fraud.
The epicenter of the accusations centers on Hayden Davis, CEO of Kelsier Ventures, a family-run company that includes his father Thomas and brother Gideon.
The plaintiffs, represented by the law firms Burwick Law and Treanor Law, accuse Davis and his associates of orchestrating a deceptive, manipulated, and fundamentally unfair launch of $LIBRA.
According to the lawsuit, tactics such as unilateral liquidity pools and sniper bots were used to artificially inflate the token’s price, benefiting a small group of insiders while 75,000 investors, many of them retail, suffered devastating losses.
Judge Rochon’s ruling ordered the freezing of $280 million in profits, including $58 million in USDC (a stablecoin on the Solana network) stored in two virtual wallets linked to the case: «Team Wallet 1» (presumably controlled by Davis) and «Milei CATA».
This measure, executed by Circle Internet Group, represents the largest freezing order obtained by an individual against a cryptocurrency issuer, according to Timothy J. Treanor, former federal prosecutor and director of Treanor Law. A hearing is scheduled for June 9, 2025, to determine whether the funds will remain frozen.
Although Javier Milei’s name is mentioned in the lawsuit for his promotional role, the law firms decided to exclude him as a defendant, along with his sister Karina Milei and other Argentines such as Mauricio Novelli and Manuel Terrones Godoy.
The reason, according to Burwick Law, was to avoid a «delaying counterpoint» with the Argentine State, which could have complicated the process. However, the lawsuit emphasizes that Milei’s endorsement created an «appearance of legitimacy» that attracted thousands of investors.
Nevertheless, in Argentina, the investigation into the $LIBRA case continues, with prosecutor Eduardo Taiano requesting additional information from Google and Meta regarding the phones of Karina and Javier Milei, according to a recent request for reports to mobile phone companies AMX Argentina SA, Telecom Personal SA, and Telefónica Móviles de Argentina SA.
This aims to cross-reference calls since January 2024 to clarify possible communications related to the alleged fraud, a process that adds to international investigations that have already frozen $280 million in profits linked to the scandal, while the Argentine judiciary, under Judge María Servini, maintains pressure on those involved, including Mauricio Novelli, who emptied his safety deposit boxes days after the token’s launch.
Similarly, the Argentine prosecutor is investigating businessmen such as Novelli, Terrones Godoy, and Sergio Morales for possible crimes of fraud, abuse of authority, and influence peddling.
More than 112 criminal complaints have been filed against the president, who deleted his promotional tweet hours after the collapse, arguing that he was «not informed» about the project’s details. The opposition has attempted to proceed with impeachment, though unsuccessfully so far.
Julian Peh, CEO of KIP Protocol, is also under scrutiny. Although Peh claimed that his company only became involved after the launch to oversee technological projects, the plaintiffs accuse him of participating in the deceptive promotion.
The Meteora platform, along with Jupiter, was also implicated for facilitating the scheme. The leak of a virtual meeting, published by Solana Floor, revealed tensions among those involved, with Defi Tuna founder Moty Povolotski alleging that Davis had complete control over the scheme.
The $LIBRA case exposes the vulnerabilities of a still underregulated crypto market, where promises of quick profits and endorsements from public figures can generate euphoria followed by devastation. The «rug pull» maneuver—where creators inflate a token’s price and then sell en masse—is a recurring scheme that has affected millions globally. The lack of effective controls, both in Argentina and in international jurisdictions, allowed $LIBRA to operate without proper oversight.
Justice, both in the U.S. and Argentina, must act firmly to protect investors and prevent further erosion of trust in cryptocurrencies. Market freedom cannot be synonymous with chaos or impunity.
The post The United States Freezes $280 Million From the $LIBRA Crypto Scandal and Targets Hayden Davis, While Milei is Excluded From the Lawsuit appeared first on The Gateway Pundit.