US Judge Unfreezes $57.6 Million in Stablecoins Linked to Libra Token Scandal

Highlights:

• A US judge released $57.6 million in stablecoins linked to the Libra scandal after finding no irreparable harm.
• Argentine President Milei faced criticism after endorsing Libra, which collapsed and left investors with major losses.
• Defendants Davis and Chow maintained their innocence while investors continued to push for restitution in court.

A U.S. federal judge has unfrozen $57.6 million in USDC connected to the Libra scandal. The assets have been frozen since May and are connected with memecoin promoter Hayden Davis and former Meteora exchange chief Ben Chow. Judge Jennifer L. Rochon ordered the freeze while overseeing a class-action lawsuit seeking more than $100 million in damages.

🚨 Breaking: U.S. judge unfreezes $57.6M USDC linked to the Libra token scandal.

👉 Funds tied to Hayden Davis & ex-Meteora CEO Ben Chow are now accessible.
👉 The scandal, once called a $107M rug pull, even pulled Argentine President Javier Milei into political controversy.
👉… pic.twitter.com/XPqE9pZMZg

— WB official (@WKLYBLCKCHAIN) August 21, 2025

Rochon said she no longer views the defendants as a threat to move or hide the assets. She noted that Davis and Chow never attempted to transfer the funds during the freeze. In her order, Rochon emphasized that money damages would be available for investors if they prevailed in court. She also determined that the plaintiffs had failed to prove irreparable harm.

Davis earlier filed a motion to dismiss the claims against him, which the court denied as moot. While unfreezing the assets, Rochon signaled doubts about the overall strength of the case. However, she stopped short of ending the proceedings, leaving the lawsuit to continue into its next phase.

Fallout from the Libra Token Scandal

The Libra token scandal began in February when the token launched with backing from Davis’ Kelsier Labs and support from Chow’s Meteora platform. The project quickly drew attention after Argentine President Javier Milei promoted Libra on social media as a way to aid small businesses. The token surged, reaching a market capitalization of more than $4.56 billion and a peak price above $4.

Within hours, however, the project collapsed. Libra lost nearly 97% of its value, erasing hundreds of millions in investor funds. Reports pegged losses at around $107 million, and investors accused Davis and Chow of orchestrating one of the largest rug pulls in recent memory. Critics argued that Milei’s online post misled traders into believing the token had government support.

Milei soon deleted his endorsement and insisted he had no involvement with the project. He said his post was no different from countless other shares of private ventures. That explanation did little to calm public anger. Lawmakers in Argentina started an ethical investigation to see if Milei’s promotion went too far. Some members of Congress even wanted him to be impeached.

The president reacted by calling off the probe and disbanding the task force. The decision triggered allegations of political interference and sparked fresh criticism from opponents who said the probe had been abandoned prematurely.

🇦🇷 𝐀𝐫𝐠𝐞𝐧𝐭𝐢𝐧𝐚'𝐬 President Milei 𝐝𝐢𝐬𝐬𝐨𝐥𝐯𝐞𝐬 the investigation task force probing the $LIBRA token fraud, despite over 100 criminal complaints and $250M in investor losses. LIBRA is now down 𝟗𝟖% from its peak.

When a 𝐬𝐜𝐚𝐧𝐝𝐚𝐥-𝐫𝐢𝐝𝐝𝐥𝐞𝐝 token gets…

— TradeDog | Crypto Market Research (@TradedogCrypto) June 13, 2025

Legal Dispute Continues in Court Amid the Unfreezing of Stablecoins Linked to Libra

While investors continue to seek restitution, the defendants have maintained their innocence. Chow’s attorney, Samson Enzer of Cahill Gordon & Reindel LLP, described the claims as untested and without merit. He indicated that his client plans to file a motion to have the case dismissed.

Chow resigned as Meteora’s chief executive following the collapse. His co-founder, known by the pseudonym Meow, said the decision reflected poor judgment in trusting Davis. This move further marked the effects in the aftermath of the failed project on the firms that were involved. The ruling by Judge Rochon to release the frozen assets provides the defendants with a temporary reprieve. Nevertheless, the suit is still pending, and investors who aim to recover their losses are still in the dark.