The cryptocurrency, promoted by Argentine President Javier Milei, has jumped 134% over the past week after a U.S. court unfroze funds linked to the token scandal.
Libra, the cryptocurrency promoted by Argentine President Javier Milei, continued to attract attention on Friday, Aug. 22, following the unfreezing earlier this week of $57.6 million in stablecoins tied to the February 2025 memecoin scandal.
The token surged to a high of $0.048 on Aug. 21, following the court decision – 1,000% higher than the $0.0048 it was trading the day before. Since then, it has retraced to $0.025, down 42% on the day but still up 134% over the past week, according to CoinGecko.
Libra’s market capitalization currently exceeds $6.6 million, with a fully diluted valuation of $25.7 million.
The surge follows a U.S. judge lifting the freeze on $57.6 million in USDC stablecoins connected to the Libra scandal earlier this week. The funds were frozen in June by the Southern District of New York as part of a class-action lawsuit against memecoin promoter Hayden Davis, former Meteora CEO Ben Chow, and blockchain infrastructure company KIP Protocol.
However, Judge Jennifer L. Rochon noted this week that the plaintiffs hadn’t shown “irreparable harm” and that defendants were not acting like “evasive actors,” The Defiant previously reported.
Case highlights larger issues
Following the judge’s decision, the situation raised broader questions about how stablecoins are managed and recovered in cases of mismanagement or fraud.
Tom Gillingham, the Vice President of Growth and Strategy at Circuit, told The Defiant that while mechanisms like freezing and unfreezing stablecoins can help in such cases, they do not fully address more common risks such as hacks or operational failures.
“In those cases, what matters most is how quickly funds can be accessed once an incident occurs, and whether operational processes and recovery frameworks are in place to enable effective recourse,” Gillingham said. “While centralized stablecoins like USDC have unique controls such as reissuance, the need is greatest where assets operate immutably on-chain and can’t be reversed at an issuer’s discretion.”
He explained that situations like the latter show that structured protocols are needed and that enforcement, asset recovery, and risk management are essential across the crypto ecosystem.
Recognition of stablecoins
Meanwhile, David Carvalho, CEO of Naoris Protocol, told The Defiant that while the decision is more procedural than precedent-setting, it is important nonetheless, as it supports judicial recognition of stablecoins as recognizable.
“The court is essentially approaching stablecoins as it would any other frozen funds, which is huge,” Carvalho said. “From the cybersecurity and compliance perspective, this decision may change the way that asset recovery in cryptocurrency-related cases will be handled going forward.”
It’s important to note that the main civil case and other probes remain active, and victims can still be awarded monetary damages.
Carvalho further explained that this decision implies courts are getting “smarter about how to differentiate the technology” from cases of misuse. “Frozen stablecoins can be unfrozen when appropriate legal standards are met, just like traditional assets,” he said.
“More broadly for the ecosystem, this underscores the need for strong KYC/AML and transaction monitoring solutions,” Carvalho said. “As stablecoins become more integrated into legal remedies, the ability to trace, freeze, and recover these assets will become a critical compliance requirement.”
The Libra scandal originally erupted in February 2025 when Milei publicly endorsed the memecoin. The token’s price initially spiked but then crashed, leading to investigations and calls for Milei’s impeachment, The Defiant reported at the time.
Although Milei distanced himself from the project, congressional probes and lawsuits continued to generate political and legal uncertainty around the token.