The US Department of Justice (DOJ) has launched an investigation into the rise and collapse of the $LIBRA memecoin, now being called a massive crypto scam. Investors reportedly lost between $87 million and $107 million, and officials are assessing whether criminal charges should be filed. The case is currently with the DOJ’s Fraud Section, which is reviewing early evidence.
The crash of $LIBRA has rocked the crypto market, leaving thousands of investors across Argentina, the US, and other countries with heavy losses. Platforms like KIP Protocol, Jupiter, and Meteora have also been caught in the mess, with authorities now investigating one of their key executives.
At the center of it all is Hayden Mark Davis, an American accused of orchestrating the scam. Others linked to the probe include Julian Peh from Singapore, Mauricio Novelli from Argentina, and Manuel Terrones Godoy, who has connections to both Argentina and Spain.
Argentine President Javier Milei has been pulled into the controversy after promoting $LIBRA on social media just before it crashed. His post on X (formerly Twitter) described it as a private project supporting small businesses in Argentina. However, as the token’s value nosedived, he distanced himself, later comparing crypto investments to gambling. His involvement has led to legal complaints and even calls for impeachment from political opponents.
Meanwhile, Davis has reportedly gone into hiding in Texas, hiring private security after receiving threats. Before disappearing, he admitted in interviews with YouTuber Coffeezilla and investor Dave Portnoy that he manipulated $LIBRA’s price, provided insider information, and kept investors’ money, except for Portnoy, who was refunded $5 million. Â
Davis runs Kelsier Ventures, a Delaware-based firm, with his brother Gideon and father, Charles Thomas Davis. His father has a history of fraud and previously served time in federal prison before moving into crypto.
If the DOJ finds solid evidence, the case could expand to involve the FBI, Homeland Security, and the SEC. While the DOJ hasn’t made an official statement, the SEC recently launched a unit focused on tackling crypto fraud, signaling a broader crackdown.
As the investigation unfolds, New York-based Burwick Law is exploring ways to help over 200 investors recover their losses. The $LIBRA case is shaping up to be one of the biggest crypto scandals in recent years.
