The rapid rise and collapse of the LIBRA meme coin have fueled suspicions of a rug pull, with blockchain data pointing to insider trading. Before the meltdown, several industry experts had warned about LIBRA’s tokenomics and raised concerns over its sustainability.

Investigations now reveal ties between LIBRA’s creators and previous pump-and-dump schemes which suggests a pattern of exploitation.

Bubblemaps Drops Bombshell

Blockchain analytics firm Bubblemaps has released new on-chain evidence linking the creators of the LIBRA and MELANIA tokens, revealing a pattern of insider trading and pump-and-dump schemes. Their investigation found that an address, P5tb4, made $2.4 million from sniping MELANIA and transferred the profits to wallet 0xcEA, which is connected to MELANIA’s creator.

Further analysis showed that this same wallet funded DEfcyK, the creator of LIBRA, who reportedly cashed out $87 million. Additionally, 0xcEA itself sniped LIBRA, generating $6 million in profit through multiple side addresses funded via the USDC Cross-Chain Transfer Protocol (CCTP).

Bubblemaps identified several other token launches tied to 0xcEA, including TRUST, KACY, VIBES, and HOOD, all of which appear to be short-lived schemes. The findings suggest a coordinated effort to launch and manipulate meme coins for massive insider gains, with LIBRA alone yielding over $100 million in profits.

Meanwhile, Jupiter crypto exchange clarified that the team was aware of a token project linked to Argentine President Javier Milei about two weeks before its release but had no direct involvement in its launch. They stated that they neither received any LIBRA tokens nor participated in insider trading despite the token’s launch being an “open secret in meme coin circles.”

The exchange also dismissed allegations of pre-verifying the contract address, asserting that verification was done only after public confirmation and sufficient trading volume. Jupiter defended its decision to list LIBRA on the Strict List, explaining that it was meant to protect users from purchasing fraudulent tokens. Jupiter has conducted an internal investigation and found no evidence of insider trading but remains open to reviewing credible reports.

Hayden Davis Dismisses Backlash

Following the outrage, Hayden Davis, the founder of the controversial meme coin, claimed that complaints mainly come from investors who were not part of insider deals. In an interview with YouTube investigator Coffeezilla, Davis defended LIBRA’s collapse as a failure rather than a scam and went on to state that meme coin trading inherently favors insiders.

When questioned about the ethics of insider advantages, he argued that launching projects without such practices would make profitability difficult.

“The vast majority of people betting on memecoins, especially at the beginning. And, I think there’s a separate conversation. Like, that is the game for everyone. And people that get mad are the people that aren’t insiders.”

LIBRA initially surged after Milei promoted it on social media which pushed its market cap above $4 billion before it crashed. Amidst the political fallout for Milei, some lawmakers are now calling for his impeachment.

The Argentine government has called on the Anti-Corruption Office to launch an inquiry into whether Milei or any officials acted improperly. The judiciary is set to review the evidence to establish if those affiliated with LIBRA, including members of the KIP Protocol, were implicated in financial crimes.

KIP’s Response

KIP Protocol has responded to the controversy surrounding its alleged involvement in the project and disputing claims made in an official statement from the Argentine presidency.

The company clarified to CryptoPotato that while its CEO, Julian Peh, did meet with President Javier Milei on October 19, 2024, the meeting took place on the sidelines of the Tech Forum Argentina trade show, where KIP Protocol was a sponsor.

Peh’s introduction to Milei was facilitated by Mauricio Novelli, the event’s organizer, whom KIP Protocol asserts has never been part of the company. The discussion primarily revolved around AI, technology, and investment opportunities in Argentina, with no mention of LIBRA. The project further claimed that it had nothing to do with the initiation, management, or direct token launch process of LIBRA.

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