Key Takeaways
- A U.S. federal judge unfroze $57 million in USDC tied to LIBRA memecoin promoters.
- Judge Jennifer Rochon ruled that plaintiffs failed to show “irreparable harm.”
- The decision sparked outrage across crypto circles, with some calling it the “legalization of crime.”
In a decision that sent shockwaves through crypto circles, U.S. District Judge Jennifer L. Rochon has unfrozen $57.6 million in USDC connected to the disgraced LIBRA memecoin.
The funds, controlled by Hayden Davis of Kelsier Labs and Ben Chow, former head of the Meteora decentralized exchange, had been locked down since May amid allegations of fraud and market manipulation.
The ruling allows Davis and Chow to regain access to the money, despite ongoing accusations that LIBRA was one of the most brazen rug pulls of 2025.
Critics say the decision not only undermines accountability but could embolden other high-profile memecoin scams.
Why the Judge Let LIBRA’s Funds Go
Judge Rochon’s reasoning came down to a technical but pivotal point: the plaintiffs failed to demonstrate “irreparable harm.”
Since the frozen funds remained untouched in their original wallets—$13 million in one and $44 million in another—the court concluded there was no risk of dissipation.
The judge also questioned whether the plaintiffs could ultimately succeed in their claims, noting a lack of concrete evidence linking the defendants to the kind of misconduct alleged in the lawsuit.
The ruling effectively resets the legal playing field, giving Davis and Chow control over millions while the case winds its way through court.
LIBRA Memecoin: From Presidential Backing to Collapse
The LIBRA saga began in February when the token launched with surprising fanfare—even garnering formal backing from Argentine President Javier Milei.
The hype drove its market cap to over $1 billion within hours. But almost as quickly, the memecoin unraveled.
Within 24 hours, LIBRA’s value plunged below $30 million, leaving investors holding the bag.
In the months since, investigations tied Hayden Davis to a string of celebrity-backed memecoin scams, fueling speculation that LIBRA was not an isolated incident but part of a larger pattern.
For many in crypto, the case had become a litmus test for whether regulators and courts would finally crack down on “rug pull” culture.
A Shadow Over Kanye’s YZY Launch
Just hours after the decision, Kanye West’s new Solana-based memecoin, YZY, launched with a market cap that briefly touched $3 billion.
On-chain sleuths were quick to draw parallels: a liquidity pool stocked only with YZY tokens, pre-funded insider wallets, and aggressive pump-and-dump trading activity.
Some traders went further, speculating that LIBRA promoters could be behind the YZY rollout. “Noted developers could dump via liquidity shifts, and insider wallets were pre-funded, implying a shared strategy with LIBRA promoters” one analyst wrote on X.
Community Reaction: “Crime Is Now Legal”
On forums and social platforms, the ruling was condemned as effectively sanctioning fraud. “Crime has become legal now,” one trader vented.
The court’s decision may not mark the end of the LIBRA saga, but it does mark a turning point.
With $57 million now back in the hands of its accused promoters, and new projects like YZY drawing comparisons to the same tactics, the case has left the industry wondering whether the system is capable—or even willing—to police itself.
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Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
