- •A U.S. judge has unfrozen $57.6 million in USDC stablecoins connected to the Libra token scandal, citing cooperation from the defendants.
- •The Libra token collapse led to investor losses estimated between $107M and $250M, sparking lawsuits and a political scandal in Argentina.
- •President Javier Milei faced an ethics investigation after promoting the token, though the probe was later closed without charges.
A U.S. judge has unblocked more than $57 million in stablecoins linked to the Libra token scandal, a case that has drawn international attention since February.
Background on the Libra Token Scandal
The controversy began in February 2025 when the $LIBRA cryptocurrency was promoted on social media by Argentine President Javier Milei. The token, marketed as a project to support small businesses in Argentina, gained rapid traction but collapsed within hours of its launch. Investors alleged it was a rug pull, with losses ranging from $107 million to as much as $250 million, depending on different filings and reports. The fallout quickly escalated into a political scandal, often referred to as Cryptogate, and was described by The Economist as the first major scandal of Milei’s presidency.
Related reading: Crypto Scam: South Korean Police Bust Fake Exchange Ring
Court Ruling and Funds Release
On August 20, U.S. District Judge Jennifer L. Rochon ruled to unfreeze approximately $57.6 million in USDC stablecoins. The assets had previously been frozen in May during hearings tied to a class-action lawsuit involving several individuals, including memecoin promoter Hayden Davis, former Meteora decentralized exchange CEO Ben Chow, KIP Protocol, and its co-founder Julian Peh.
Judge Rochon noted that the defendants had cooperated with proceedings and had not attempted to move the frozen funds. She also stated that victims could still be reimbursed since other resources remained available. While she expressed doubt that the class-action lawsuit would succeed, the case is ongoing, and motions from the defense to dismiss certain claims have already been denied as moot.
Political Implications in Argentina
The Libra collapse sparked significant backlash in Argentina, particularly after Milei’s involvement in initially promoting the project. Lawmakers called for an ethics investigation into the president, with some even urging impeachment proceedings. Milei later distanced himself, saying he had no connection to the project beyond posting a supportive tweet. The congressional probe was eventually closed without charges, though critics argued the decision was politically motivated.
Closing Thoughts
The decision to unfreeze over $57 million in stablecoins offers temporary relief for the defendants, but the Libra scandal remains a major unresolved issue. As the lawsuits continue and political scrutiny lingers, the case underscores how high-profile figures and large sums tied to crypto can quickly become matters of both legal and political consequence.
