Burwick Law files class action lawsuit against La Libertad Avanza, also known as the Libra token, in the U.S. Supreme Court of New York

According to the lawsuit, market manipulation caused large losses for ordinary investors.

A class action lawsuit has been filed in the U.S. Supreme Court of New York against La Libertad Avanza, also known as the Libra token, for allegedly launching the product in a deceptive manner, causing financial harm to investors, reports Chain Teller.

According to the lawsuit filed by Burwick Law, the token’s developers used Meteora’s DeFi pools to manipulate Libra’s price, gaining control over the token’s market value. The firm claims that shortly after trading began, insiders withdrew stable assets, including SOL and USDC, leading to a rapid decrease in the token’s price.

“Defendants’ insiders rapidly siphoned approximately $107 million from the liquidity pools, causing an immediate 94% collapse in the token’s market valuation,” stated Burwick Law.

The complaint, which was filed on behalf of American and Chinese investors who allegedly suffered losses, names Meteora, KIP Protocol, and Kelsier Ventures as defendants. It also mentions Argentine President Javier Milei, who endorsed the token. However, Milei is not a defendant in the lawsuit.

The lawsuit follows reports by Argentine media outlets, which covered the creation of the token and its connection to President Milei. One report by El Cronista names Karina Milei, the president’s sister, who was an advisor to the token.

The report claims that the token was launched with the aim of raising $500 million to fund Milei’s presidential campaign. However, the project quickly fell apart, leaving many investors with significant losses.

President Milei has denied any involvement in the token project and blamed the investors for their losses. He compared the situation to gambling at a casino.

“If you go to the casino and lose money, it’s your problem. They went to a project that was advertised as high-risk, and they lost money,” said President Milei.

Despite this, he has ordered a government investigation into the incident. Additionally, Argentine prosecutors are already pursuing legal actions against the implicated entities.

The case has sparked debate over the regulation of cryptocurrency markets and the potential for abuse by those in positions of power. It also raises concerns about the risks faced by retail investors in volatile markets.