The judge cited ongoing cooperation of the defendants in the case as one of the reasons for unfreezing the stablecoins.
A US judge has unfrozen $57.6 million in USDC (USDC) stablecoins tied to the Libra token scandal in February, giving memecoin promoter Hayden Davis and former CEO of the Meteora decentralized exchange Ben Chow access to the funds.
US judge Jennifer L. Rochon froze the funds in May as part of a hearing in a class-action lawsuit against Davis, Chow, blockchain infrastructure company KIP Protocol and KIP’s co-founder, Julian Peh.
The Judge said the defendants did not demonstrate “irreparable” harm because the funds to reimburse victims are still available, and the defendants have made no effort to move the frozen funds, according to Law360.
In July, Davis filed a motion to dismiss the lawsuit against him, which was denied as “moot” by the court. Despite this, Rochon said she was doubtful that the class-action lawsuit against Davis, Chow and others would succeed.
The Libra token scandal is considered one of the most significant rug pulls in history, drawing in Argentine President Javier Milei, prompting an ethics investigation into the leader and class-action lawsuits from investors.
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The Libra token scandal and the aftermath that rocked the crypto world
The Libra token launched in February, billing itself as a project to help support Argentina’s small businesses, and was initially promoted by Milei on social media.
Libra crashed and burned within hours of launching, prompting widespread backlash from investors who were caught up in what was characterized as a $107 million rug pull.
Milei distanced himself from the token, denying knowledge of the project’s fundamentals and backtracking on the initial promotion.
“A few hours ago, I posted a tweet, like so many other countless times, supporting a supposed private venture with which I obviously have no connection,” Milei wrote in a Feb. 14 X post.
The statement did little to stem a congressional probe into Milei for possible ethics violations and calls from Argentine lawmakers to impeach Milei.
However, Milei closed the investigation and disbanded the task force without any charges or findings of wrongdoing against the president’s office, prompting allegations of a politically motivated cover-up.
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