Libra memecoin lawsuit dismissed in New York as Argentine court clears Milei, leaving investors with no case on either front

A US federal judge has dismissed the class-action lawsuit over the LIBRA and M3M3 memecoin launches, ruling that investors’ RICO claims against Hayden Davis, Kelsier Ventures and ex-Meteora CEO Benjamin Chow covered too short a period to qualify as a racketeering pattern. An Argentine court has since cleared President Javier Milei, closing the second front in a collapse that cost an estimated $110 million.

Why the judge rejected the investors’ claims

A central issue in the Libra crypto case was whether the alleged activities met the requirements of the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.

The federal law allows qualifying claims involving patterns of racketeering activity, but plaintiffs must establish specific legal elements rather than rely solely on allegations of suspicious transactions or financial losses.

According to the court’s reasoning, the period covered by the alleged conduct was too short to establish the required continuity for a closed-ended racketeering pattern.

The complaint described activities spanning approximately six months, from October 2024 through March 2025. The judge found that this timeframe did not meet the applicable legal standard.

The court also considered whether the allegations established a continuing threat of similar unlawful activity. The plaintiffs’ arguments did not adequately demonstrate that the alleged conduct amounted to an ongoing pattern satisfying RICO requirements. The associated racketeering conspiracy claim therefore failed as well.

The judge rejected other aspects of the complaint on separate grounds. Claims involving Chow were dismissed because the allegations did not sufficiently establish the required elements of fraud.

The plaintiffs also failed to demonstrate that Meteora, as described in the complaint, was an entity capable of being sued on the asserted basis. In addition, certain claims against the Kelsier defendants encountered jurisdictional obstacles.

These findings explain why the Libra crypto case ended without a trial or a full examination of the underlying allegations. The ruling addressed whether the plaintiffs had presented legally sufficient claims, not whether every disputed transaction had been conclusively explained.

LIBRA’s launch and the controversy surrounding the token

LIBRA launched on the Solana blockchain on February 14, 2025. The token gained widespread attention after Argentine President Javier Milei published a social media post linking to the project and its token address. The post helped draw public interest and trading activity before the token’s price fell sharply.

The subsequent collapse raised concerns among traders about liquidity, token distribution and the risks associated with politically promoted memecoins.

Investors later alleged that parties connected to the launch had taken advantage of the trading environment. Those accusations became part of the broader legal dispute involving LIBRA and M3M3.

The Libra crypto case also drew attention to the difficulties of pursuing recovery through US courts when cryptocurrency transactions involve blockchain addresses, multiple entities and participants operating across different jurisdictions.

The complaint described alleged movements of funds from liquidity pools and questioned how participants benefited from the launches.

However, the dismissal means those allegations were not fully tested through discovery and a trial in this proceeding. No final judicial determination in this case established that the defendants committed the alleged fraud.

Argentine court clears Milei in the Libra crypto case

The Argentine ruling adds another major development to the Libra crypto case, following the separate dismissal of the US investor lawsuit earlier in October.

Federal Judge Marcelo Martínez de Giorgi cleared Milei, his sister Karina Milei and other defendants after prosecutors sought the dismissal of the criminal allegations.

According to the report, the decision followed a review of whether the defendants could be linked to the alleged crimes. The court found insufficient conclusive evidence connecting them to the accusations. It also determined that the available evidence did not establish that a scam had taken place.

The court considered the token’s actual launch and blockchain activity, as well as whether investors had been promised future profits. It concluded that losses resulting from trading a highly volatile memecoin were not, by themselves, sufficient proof of fraud.

Milei’s role in the controversy stemmed from his social media promotion of LIBRA shortly after its launch. The token subsequently suffered a steep price decline, reportedly affecting more than 40,000 investors and resulting in losses estimated at nearly $110 million.

The court also rejected allegations involving abuse of authority, incompatible negotiations and influence peddling. In relation to the president’s sister, Karina Milei, the ruling found insufficient evidence to support the accusation that she had received money to facilitate access to the president.

What the Libra crypto case means for investors

For cryptocurrency investors, the latest outcome highlights the difference between financial losses and legally established fraud. A token’s rapid decline can leave holders facing substantial losses, but establishing criminal wrongdoing generally requires evidence that meets the applicable legal standards.

The Libra crypto case also demonstrates the challenges of investigating memecoin launches. Token distribution, liquidity movements, social media promotion and wallet activity can all become relevant when investigators examine a controversial project.

However, proving that particular individuals committed a crime requires more than showing that a token lost value or that transactions took place.

The dismissal of the Argentine criminal allegations follows the US class-action lawsuit’s dismissal, which had already weakened investors’ efforts to pursue compensation through that particular legal action.

The US proceedings and the Argentine investigation were separate matters, and their outcomes arose from different legal processes.

Another element of the story concerns a trust established to distribute more than $110 million associated with LIBRA token sales to Argentine entrepreneurs through a grant system.

The report said the initiative was launched in May, with a distribution target before November, but provided no further update on the funds’ allocation.