A Manhattan federal judge, Jennifer L. Rochon, unfroze $57.6 million in USDC stablecoins tied to the Libra meme coin scandal, allowing promoters Hayden Davis and Ben Chow to regain access.
The decision was based on the defendants’ cooperation and the judge’s skepticism about the plaintiffs’ likelihood of success in their class-action lawsuit seeking over $100 million in damages. The Libra token, launched in February 2025 and promoted by Argentine President Javier Milei, crashed 97% within 24 hours, sparking allegations of a $107 million rug pull.
The unfreezing led to a temporary spike in Libra’s price, with reports of a 103% to nearly 400% surge, though it later cooled. The lawsuit, filed by Burwick Law, alleges Davis and Chow misled investors by leveraging Milei’s promotion to falsely suggest legitimacy. The case remains ongoing, with no resolution on substantive claims.
The unfreezing of $57.6 million in USDC stablecoins, previously locked due to a class-action lawsuit, led to a temporary price surge for Libra, with reports of a 103% to nearly 400% increase shortly after the August 20, 2025, court ruling.
This spike reflects speculative trading driven by the news, as investors may have anticipated renewed liquidity or project developments. However, the price later stabilized, indicating the surge was likely driven by short-term sentiment rather than fundamental value.
Promoters Hayden Davis and Ben Chow regaining access to these assets could enable them to reinvest in liquidity pools or marketing efforts, potentially stabilizing Libra’s market presence temporarily. However, their involvement in the alleged $107 million rug pull and subsequent legal scrutiny raises concerns about their credibility, which could deter long-term investor confidence.
The unfreezing does not resolve the ongoing federal criminal probe or class-action lawsuit alleging fraud and market manipulation. Regulatory bodies, including the SEC and DOJ, are investigating potential securities violations and money laundering, which could lead to further restrictions or penalties.
This uncertainty hampers Libra’s ability to regain institutional or retail investor trust. The scandal, dubbed “Cryptogate,” has severely damaged Libra’s reputation, with 86% of traders losing $251 million and allegations of insider trading. The concentration of 82%-84% of the token supply in the hands of a few insiders further fuels distrust, making it difficult to attract new capital.
The unfreeze and ongoing investigations could exacerbate Argentina’s economic instability, as the scandal has already contributed to a 5% drop in the country’s stock market and eroded public trust in President Javier Milei, who promoted the token. This political fallout may limit Libra’s ability to secure legitimate partnerships or government-backed initiatives.
Why Libra Is Unlikely to Reach Its ATH
Libra was marketed as a tool to fund Argentine businesses, but its meme coin structure lacks intrinsic utility or a sustainable economic model. Unlike stablecoins backed by real assets or projects with clear use cases, Libra’s value was driven by hype and Milei’s endorsement, which has since been retracted.
Blockchain data revealed that 82%-84% of Libra’s supply was held by a small group of insiders who cashed out $87-$107 million during the initial crash. This centralization and the perception of a pump-and-dump scheme make it unlikely for retail investors to return in significant numbers, limiting upward price momentum.
The Libra collapse drained $251-$286 million in liquidity from the altcoin market without bringing in fresh capital, as it merely shifted funds from other assets. Memecoins like Libra often fail to recover after such crashes due to their reliance on speculative trading rather than organic growth. The broader crypto market’s focus on more established assets like Bitcoin and Ethereum further reduces Libra’s appeal.
The SEC’s investigation into whether Libra violated securities laws, combined with potential money laundering probes, could lead to delistings from exchanges or stricter regulations. The lack of transparency in the token’s launch and the absence of liquidity locks or fair launch mechanisms deter institutional investment.
Memecoins like $TRUMP and $MELANIA, which followed similar playbooks, lost 71%-90% of their value post-launch and failed to recover due to insider profiteering and lack of utility. Libra’s 89.4%-96% crash mirrors this pattern, and the market’s increasing skepticism toward politically endorsed tokens reduces its recovery potential.
Libra’s current trading price (around $0.12-$0.32 as of February 2025) is significantly below its ATH, with low trading volume ($62.45-$158 million daily) indicating weak market interest. Technical indicators, such as a neutral RSI and declining holder count (from 50,000 to 35,770), suggest limited momentum for a sustained rally.
Analysts predict a potential bull run in 2025, but this is likely to favor established cryptocurrencies like Bitcoin, which could reach $200,000, rather than speculative memecoins. Libra’s lack of unique features or partnerships, combined with competition from other altcoins, makes it unlikely to capture significant market share.
Some analysts, like DigitalCoinPrice, project Libra could reach $0.50-$0.70 by the end of 2025, driven by a potential crypto bull market. However, these predictions are speculative and based on historical bull market trends, not Libra-specific developments. If Milei or other high-profile figures re-endorse Libra, it could spark another speculative surge.
However, Milei’s deletion of his initial endorsement and ongoing investigations make this unlikely. The unfrozen $57.6 million could be used to restore liquidity or fund development, but the promoters’ track record of alleged misconduct reduces the likelihood of this restoring investor confidence.
While the unfreezing of $57.6 million in assets triggered short-term price volatility, Libra’s path to its ATH of $0.75-$4.61 or a $4.5 billion market cap is obstructed by its lack of fundamental value, insider trading allegations, regulatory scrutiny, and a damaged reputation.
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