A US judge has reactivated $57.6 million in USDC (USDC) stablecoins linked to the Libra token scandal as of February, allowing memecoin promoter Hayden Davis and former CEO of the Meteora decentralized exchange Ben Chow to access the funds.
Judge Jennifer L. Rochon had previously frozen the funds in May during a hearing for a class-action lawsuit against Davis, Chow, blockchain infrastructure firm KIP Protocol, and KIP’s co-founder, Julian Peh.
According to Law360, the Judge stated that the defendants did not prove “irreparable” harm since funds for victim reimbursement are still accessible, and the defendants have not attempted to move the frozen assets.
In July, Davis’s motion to dismiss the lawsuit against him was deemed “moot” by the court. Nonetheless, Rochon expressed skepticism about the likelihood of success for the class-action lawsuit against Davis, Chow, and others.
The Libra token scandal is regarded as one of the most notable rug pulls in history, involving Argentine President Javier Milei and leading to an ethics investigation into him and class-action lawsuits from investors.
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The Libra token scandal and its repercussions in the crypto space
Launched in February, the Libra token was marketed as a project aimed at supporting Argentina’s small businesses, initially promoted by Milei on social media.
However, Libra plummeted shortly after its launch, provoking significant backlash from investors who experienced what was termed a $107 million rug pull.
Milei distanced himself from the token, claiming ignorance of its actual workings and retracting his initial endorsement.
“A few hours ago, I posted a tweet, like so many others, endorsing a supposed private venture with which I clearly have no ties,” Milei stated in a Feb. 14 X post.
This statement did not prevent a congressional investigation into Milei for potential ethics violations and requests from Argentine lawmakers for his impeachment.
However, Milei concluded the inquiry and disbanded the task force without any charges or findings of misconduct within the president’s office, prompting accusations of a politically motivated cover-up.
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