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Burwick Law has filed a class action lawsuit against La Libertad Avanza, also known as the Libra token, in the U.S. Supreme Court of New York, alleging that the token’s developers launched the product in a misleading manner. According to the lawsuit, market manipulation caused large losses for ordinary investors.
Although Argentine President Javier Milei is mentioned in the complaint as having endorsed the token, he is not specifically listed as a defendant. Karina Milei, his sister, who was publicly accused, is also left out. Nonetheless, the stated defendants include Meteora, KIP Protocol, and Kelsier Ventures.
According to Burwick Law, the token’s creators exploited Meteora’s DeFi pools to manipulate Libra’s price. This approach allegedly allowed them to gain control over the token’s market value. The firm claims that soon after trading began, insiders withdrew stable assets, including SOL and USDC, leading to a rapid collapse.
“Defendants’ insiders rapidly siphoned approximately $107 million from the liquidity pools, causing an immediate 94% collapse in the token’s market valuation,” stated Burwick Law. The complaint alleges that thousands of investors, primarily from the U.S. and China, suffered financial harm.
President Milei has denied any involvement, dismissing the accusations against him. He compared the investors’ losses to gambling, stating, “If you go to the casino and lose money, it’s your problem.” Despite this, he has ordered a government investigation into the incident. Argentine prosecutors are already pursuing legal actions against the implicated entities.
The case highlights the ongoing concerns surrounding the regulation of cryptocurrency markets. With significant investor losses and mounting legal challenges, the Libra token controversy underscores the risks faced by retail investors in volatile markets.