[NEWS] Meteora Co-Founder Resigns After Libra's Collapse

On the 18th, Ben Chow, co-founder of the platform Meteora, which facilitates the issuance and trading of meme coins, resigned following allegations of insider trading related to the collapse of Libra (LIBRA). This decision is believed to have been influenced by the sharp fluctuations in Libra’s value and the resulting suspicions.

LIBRA was launched on February 15, 2025, and quickly reached a market capitalization of approximately $4.5 billion. However, within hours, its value plummeted by nearly 95%. This sudden price collapse has been attributed to large-scale sell-offs by insiders, with Chow suspected of privately managing a portion of the tokens. A co-founder using the pseudonym Meow noted that while Chow is personally trustworthy, his actions as a leader were problematic.

Investigation and Future Prospects

Meteora has announced that it has engaged the law firm Fenwick & West to conduct an internal investigation. The findings will be made public to ensure transparency.

This series of events has also increased political pressure on Argentine President Javier Milei, who has been criticized for his involvement in promoting Libra. While Milei has defended himself, stating that he "only helped spread information," the investigation is still ongoing.

Shortly after Libra's launch, its market value surged, only to plummet by nearly 95% within a matter of hours. One major factor behind this abnormal price fluctuation was the large-scale sell-off by insiders. Estimates suggest that tokens worth approximately $87 million were offloaded in a short period, triggering the steep price drop.

Additionally, Libra’s tokenomics had significant flaws. At the time of its launch, 82% of the total supply was already available for trading in the market, making it easier for insiders to manipulate prices. The excessive liquidity of the tokens allowed internal stakeholders to quickly sell off their holdings for profit, further destabilizing the market.

Furthermore, President Javier Milei initially promoted Libra as a "tool to support startups" and a means to "contribute to Argentina’s economic growth." However, when he later withdrew his endorsement, investor confidence collapsed, spreading panic among market participants. As a result of this drastic decline, more than 40,000 investors reportedly suffered losses, fueling discussions about tighter regulatory oversight.

Following Libra’s collapse, President Milei has faced allegations of fraud and bribery, becoming the subject of investigations by the U.S. Department of Justice and the FBI. Depending on the outcome of these investigations, his political career could be significantly affected.

The Libra scandal has reignited debates on regulatory frameworks and transparency in the cryptocurrency market, highlighting the need for stricter oversight and better safeguards against market manipulation.

Reference: meow X
Image: Shutterstock

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