The New York Supreme Court is set to hear a lawsuit against the creators of the Libra (LIBRA) token, accusing them of deceiving investors and siphoning off more than 100 million dollars through an unfair liquidity scheme.

What started as a promising cryptocurrency project quickly turned into a financial nightmare for thousands of investors. Now, with allegations of manipulation, insider profits, and political influence, the case could set a significant precedent for how cryptocurrency projects handle investor funds. Could this lawsuit expose one of the biggest cryptocurrency scams in recent years?

The lawsuit has been filed against Kelsier Ventures, KIP Protocol, and Meteora

On March 17, Burwick Law filed a class-action lawsuit against Kelsier Ventures, KIP Protocol, and Meteora, alleging they launched LIBRA in a fraudulent manner. The lawsuit also highlights how Argentine President Javier Milei promoted the token on X (formerly Twitter) as a way to boost private sector funding in Argentina.

The lawsuit criticizes KIP and Meteora for using a one-sided 'predatory' liquidity pool to artificially inflate LIBRA's price. This setup allegedly allowed insiders to cash out with massive profits while ordinary investors suffered losses. Within hours of launch, insiders reportedly withdrew around 107 million dollars, causing LIBRA's value to plummet by 94%.

Is President Milei involved?

Although President Milei is mentioned in the lawsuit, he is not named as a defendant. Burwick Law argues that companies used Milei's influence to make LIBRA appear more legitimate, misleading investors about its potential. The lawsuit also reveals that 85% of LIBRA tokens were withheld at launch, a fact not disclosed to investors.

Investors suffer huge losses while insiders profit

Burwick is seeking financial compensation for investors, legal action against the involved companies, and measures to prevent future fraud when launching cryptocurrency tokens. According to blockchain analytics firm Nansen, 86% of the 15,430 largest LIBRA wallets have sold at a loss, totaling 251 million dollars. Meanwhile, only 2,101 wallets made a profit, earning 180 million dollars.

Kelsier Ventures and the company's CEO, Hayden Davis, are among the biggest beneficiaries, reportedly making around 100 million dollars. Davis, who may now face a red notice from Interpol, has denied owning or selling any tokens directly.

Milei has denied actively promoting LIBRA, claiming he was merely 'spreading the word' about it. Despite legal challenges, the opposition in Argentina has not succeeded in their efforts to impeach him over the scandal.

As the case unfolds, the cryptocurrency world is watching closely – because if the creators of LIBRA can get away with it, who will be next?