In a developing story, a U.S. judge has made a significant decision in the ongoing Libra token scandal. Judge Rochon unfroze $57.6M in USDC stablecoins linked to the case.
The ruling allows key figures involved, Hayden Davis and former Meteora exchange CEO Ben Chow, to access these funds.
What Is the Libra Token Scandal?
In February 2025, the $LIBRA token launched on the Solana blockchain, promoted as a project to support small businesses in Argentina.
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Even Argentine President Javier Milei endorsed the token on social media, in now deleted posts, sparking massive interest.
The token’s value soared to $4.5 billion within hours but crashed by 97%, resulting in $250 million in losses for investors.
Blockchain experts labeled it a “rug pull,” alleging that insiders, including those tied to the project, withdrew $107 million, leaving regular investors with heavy losses.
Judge’s Decision to Unfreeze Funds
On August 21, 2025, U.S. Judge Jennifer L. Rochon unfroze $57.6 million in USDC stablecoins that had been locked since May.
These funds were frozen as part of a class-action lawsuit against Hayden Davis, Ben Chow, KIP Protocol and KIP’s co-founder, Julian Peh.
The lawsuit claims they defrauded investors in the $LIBRA collapse.
Judge Rochon cited the defendants’ cooperation as a key reason for unfreezing the funds.
She said the defendants have not interfered with the frozen money and that funds to compensate victims were still available.
However, Hayden Davis’s attempts to dismiss the lawsuit against him were rejected by the court.
Despite this, the unfreezing of the funds is a win for Davis, Chow, and their co-defendants.
Political and Legal Fallout
The Libra token scandal has had far-reaching consequences.
In Argentina, President Milei faced heavy criticism for promoting $LIBRA.
After the token crashed, he deleted his social media post and claimed he had no direct connection to the project. Milei claimed he only shared a “private venture” in good faith.
“I posted a tweet, like so many other countless times, supporting a supposed private venture with which I obviously have no connection.”
Javier Milei
Despite this, Argentine lawmakers launched a congressional probe into possible ethics violations, and called for his impeachment.
Milei managed to shut down the investigation in May 2025.
Impact on Investors and the Crypto World
The $LIBRA collapse is considered one of the largest rug pulls in cryptocurrency history.
Over 15,000 investors lost a combined $251 million, while a small group of insiders reportedly profited $180 million.
Blockchain data revealed that eight wallets linked to the $LIBRA team withdrew $107 million in liquidity, including $57.6 million in USDC and $49.7 million in Solana (SOL).
The scandal has shaken confidence in Argentina’s crypto market and memecoins worldwide.
The unfreezing of the $57.6 million is a major development, but the Libra token scandal is far from over.
A U.S. court hearing involving Davis, Chow, and others is scheduled for August 19, 2025.
The Libra token scandal case continues to raise questions about trust in cryptocurrencies and the responsibility of public figures in promoting them.
