26-2-2025 – The United States Department of Justice has initiated a formal investigation into the meteoric rise and subsequent catastrophic collapse of the $LIBRA memecoin. The case, which has left investors nursing losses estimated between $87 million and $107 million, is currently under scrutiny by the DOJ’s Fraud Section as investigators compile preliminary evidence to determine whether criminal charges are warranted.
The controversy has unexpectedly entangled Argentine President Javier Milei, whose public endorsement of $LIBRA on social media platform X came shortly before the token’s devastating crash. Milei’s post characterised the project as a private initiative supporting Argentine small businesses, a position he rapidly retreated from as the token’s value plummeted. His subsequent comparison of cryptocurrency investments to gambling has provoked fierce backlash, with political adversaries filing legal complaints and even demanding his impeachment over the affair.
At the investigation’s epicentre stands Hayden Mark Davis, an American national accused of masterminding the alleged scheme. Before reportedly seeking refuge in Texas with private security protection following threats, Davis made remarkable admissions in interviews with social media personality Coffeezilla and investor Dave Portnoy, acknowledging price manipulation, sharing insider information, and retaining investors’ funds—with the notable exception of Portnoy, who received a $5 million refund.
The widening investigation also encompasses Julian Peh from Singapore, Argentine national Mauricio Novelli, and Manuel Terrones Godoy, who maintains connections to both Argentina and Spain. Davis operates Kelsier Ventures, a Delaware-registered enterprise, alongside his brother Gideon and their father, Charles Thomas Davis—the latter having previously served a federal prison sentence for fraud before transitioning to cryptocurrency ventures.
The collapse has reverberated throughout cryptocurrency markets, devastating thousands of investors across Argentina, the United States, and numerous other countries. The aftershocks have touched several prominent platforms, including KIP Protocol, Jupiter, and Meteora, with authorities now scrutinising one of their senior executives in connection with the case.
Should the Department of Justice uncover substantial evidence of wrongdoing, the investigation could potentially expand to include the Federal Bureau of Investigation, Department of Homeland Security, and the Securities and Exchange Commission. While the DOJ has yet to issue an official statement regarding the matter, the SEC’s recent establishment of a specialised unit focused on cryptocurrency fraud suggests an intensified regulatory approach to digital asset markets.
New York-based legal firm Burwick Law is exploring potential avenues to assist more than 200 affected investors in recovering their losses. The extraordinary scale of investor harm positions the $LIBRA debacle as potentially one of the most significant cryptocurrency frauds in recent years, raising profound questions about regulatory oversight and investor protection in digital asset markets.
