Burwick Law firm announced on March 18 that it has filed a class action complaint in the Supreme Court of New York on behalf of its client. The law firm alleged that Kelsier, KIP, Meteora, and related parties set up an unfair token launch of LIBRA.
The law firm believes that the accused parties allegedly misled purchasers and harmed retail investors through their unfair LIBRA launch. The firm noted that this pattern was similar to many of the other tokens launched by the Defendants. The lawsuit noted that the Defendants gained at the cost of participants through misleading marketing tactics and a failure to disclose material facts that would have raised concerns about the project’s viability.
Burwick Law files complaint against Kelsier, KIP, and Meteora
Burwick Law firm filed a complaint in the Supreme Court of New York on behalf of its client. The firm acknowledged that the plaintiff’s information was based on their counsel’s investigation, which included reviewing and analysing press releases, news articles, websites, state corporate filings, and other publicly available information regarding the LIBRA token.
The law firm alleged that Kelsier Ventures, Meteora, and KIP Protocol orchestrated a deceptive, manipulative, and fundamentally unfair launch of the LIBRA token. The firm believes that the Defendants promoted the digital asset as a meaningful economic initiative designed to boost economic growth in Argentina by funding small businesses and startups.
LIBRA’s official website read in part “In honor of Javier Milei’s libertarian ideas, we are launching $LIBRA Token, designed to strengthen the Argentine economy from the ground up by supporting entrepreneurship and innovation.”
The token’s promotional efforts leveraged the endorsement of Argentina’s President, Javier Milei, which created the appearance of legitimacy and significant investment value for the token. The law firm noted that purchasers didn’t know the Defendants had implemented an unfair and manipulative token distribution strategy utilizing liquidity pools on the Meteora decentralized exchange platform.
Defendants leverage a single-sided liquidity model
Burwick Law firm alleged that the Defendants employed a single-sided liquidity model unlike typical decentralized finance structures, which rely on genuine two-sided liquidity. Two-sided liquidity often pairs tokens like LIBRA with stable assets such as USDC or SOL. The law firm highlighted that the single-sided liquidity model inflated the price of LIBRA and created an illusion of market stability and value where none truly existed.
The complaint also indicated that the Defendants artificially controlled the token’s price and manipulated market dynamics by structuring the liquidity pools exclusively with LIBRA tokens. The firm acknowledged that the defendants strategically withheld roughly 85% of the token’s total supply at launch, which directly maintained exclusive control over the token’s valuation and liquidity.
Burwick Law also alleged that the Defendants were able to discretely extract stable assets such as USDC and SOL from retail purchasers once trading commenced. The lawsuit noted that the Defendant’s insiders rapidly siphoned around $107 million from the liquidity pools within hours, which caused an immediate 94% collapse in the token’s market valuation.
The law firm also accused the Defendants of failure to disclose critical material facts to purchasers about the LIBRA token. Defendants didn’t inform potential purchasers about the true liquidity structures, insider control of token supply, and deliberate mechanisms allowing insiders to monetise token holdings secretly. Burwick Law firm alleged that the Defendants instead created a misleading narrative that promoted LIBRA as a legitimate product intended to support economic growth in Argentina.
The lawsuit highlighted that Meteora was involved in both the technology and market management aspects of the token’s launch. It directly enabled and supported the insider trading mechanism that caused significant harm to the retail investor class.
The law firm said the Plaintiff and the Class suffered financial losses due to the Defendants’ deceptive and fraudulent conduct. Burwick Law firm noted that the plaintiff was seeking compensatory and punitive damages and disgorgement of the Defendants’ unjustly obtained profits. The plaintiff was also seeking injunctive relief to prevent further fraudulent token offerings and the appointment of a receiver to protect the public and secure remaining investor assets.
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