A Manhattan federal judge has released $57.6 million in USDC tied to the Libra coin dispute, with it raising discussions around the potential use of the funds. The amount of USDC had been frozen since May amid allegations of fraud and market manipulation.
As per reporting from Law360, Judge Jennifer L. Rochon said there was no clear reason to keep the money frozen. Both defendants, Hayden Davis of Kelsier Labs and Ben Chow, former head of the Meteora exchange, had cooperated. Rochon added that defendants have not attempted to move funds.
The wallets still hold $13 million and $44 million, untouched since June. This showed that plaintiffs could be compensated later if damages were owed. The court said speculative arguments alone do not justify an emergency freeze.
Plaintiffs argued that Libra promoters exaggerated public figures’ endorsements to attract investors. The judge said this did not prove fraud. Without evidence of irreparable harm, a freeze was not justified.
Meanwhile, defense attorneys argued that the ruling shows the case is weak and are preparing motions to dismiss. Onto this, plaintiffs’ lawyers have stayed silent, hinting they might change their strategy.
Courts Treat Crypto Like Traditional Finance
The case shows courts apply the same rules to crypto as traditional finance. Judges need proof of harm before freezing assets. This protects defendants but can slow investor claims.
Libra coin’s price rose briefly after the ruling but remains far below its peak. This reflects careful judicial handling and how the market can react quickly to sentiments.
The decision could set a precedent for future digital asset litigation. While courts are following core principles, class action plaintiffs will need solid evidence to justify freezing funds. Courts will continue requiring clear proof, even as regulators pursue fraud cases more strictly.
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