• LIBRA founder admits project was never a serious financial investment.

• $280M in crypto frozen as memecoin fraud case gains momentum.

• Judge sets August 19 hearing amid push to relocate trial.

The LIBRA crypto case has taken a surprising turn. Hayden Davis is the entrepreneur behind the controversial LIBRA token. He has admitted in a U.S. court filing that the project was never meant to be a serious investment. Instead, he called it a memecoin, a speculative and humorous cryptocurrency. This is revealed as a legal process goes on with a case involving 280 million frozen funds.

Memecoin LIBRA Faces Legal Heat Over Fraud Allegations

The Argentine media Clarin reported that Davis said this in a filing before Judge Jennifer L. Rochon of the Southern District of New York. Fans of Argentine President Javier Milei promoted the LIBRA token online earlier this year. The token quickly gained and lost value within hours. This sudden price change caused fears of fraud.

Notably, the legal team of Davis claims that LIBRA was not introduced as an organized investment. According to them, it had no business plan, no distribution strategy, and no plan on how the money would be spent. Rather, they say that memecoins such as LIBRA are simply unsecured affinity and collectible goods that have no value, per se.

In the meantime, suspicious financial activity is a matter of speculation. Davis-linked wallets sent roughly $500,000 worth of USDC to the Kraken crypto exchange on January 30, allegedly in a meeting with President Milei. Within an hour after an image of that meeting appeared on the internet, another wallet transferred more than half a million dollars with the help of Bitget. Both wallets have been linked to Davis and other tokens he has marketed, with one called MELANIA, after the U.S. First Lady Melania Trump.

This ongoing case is being driven by a private investor, Omar Hurlock. Omar Hurlock wants to start a class action lawsuit against Davis and others. He includes Benjamin Chow and Julian Peh in the case. However, Judge Rochon recently rejected his request to question the defendants. She explained that Hurlock had not shown any personal injury. As a result, the case cannot move forward in that direction yet.

Defense Seeks to Move LIBRA Case Out of New York

The defense team of Davis is fighting back. They say that the lawsuit by Hurlock is being fronted by a so-called crypto ambulance chaser, i.e. lawyer Max Burwick. Burwick has a reputation of representing investors in collapsed crypto projects and often targets clients on social media to build a class action.

Besides refuting the gravity of the LIBRA token, the lawyers of Davis are trying to change the location of the case out of New York. They propose an Argentinian or a Texas court, perhaps because of the more favorable legal environment.

Regardless of the legal volleying, there is one thing that is definite; 280 million worth of crypto funds remain locked up. It is considered that these funds are associated with an early profit of those people who were involved in the LIBRA launch.

The following significant step will be made on August 19, when a court hearing in New York will consider the case details further. This entails how the money came in, how it was spent and even the political ties, which may be involved. The future of the money and the individuals behind the memecoin is still unknown up until now.