In a dramatic twist to the ongoing LIBRA meme coin controversy, a U.S. federal court in New York has rejected an aggressive bid by international investment funds to seize millions in cryptocurrency assets, dealing a blow to creditors seeking repayment for Argentina’s historic debt. The decision, delivered on October 21, 2025, by Judge Jennifer Rochon of the Southern District of New York, has not only frustrated the funds’ collection efforts but also cast fresh scrutiny on the private individuals at the heart of the scandal—including Argentine President Javier Milei, his sister and Secretary General Karina Milei, and LIBRA promoter Hayden Mark Davis.
For months, the LIBRA token—a digital asset that soared in value amid a wave of online hype—has been mired in controversy. At the center of the storm is the connection to President Milei, whose vocal promotion of the meme coin has drawn both popular attention and legal peril. According to El Diario and Infobae, the latest legal battle was sparked when four major international investment funds—Palladian Partners, HBK Master Fund, Hirsh Group, and Virtual Emerald International Limited—sought to tie the LIBRA assets directly to the Argentine State, hoping to seize them as compensation for a decades-old debt.
The roots of the dispute stretch back to Argentina’s catastrophic 2001 economic crisis, when the country defaulted on its sovereign debt. In the aftermath, these funds acquired GDP-linked bonds as part of a sweeping debt restructuring. These securities promised payouts if Argentina’s economy grew above certain thresholds, but by 2019, the funds accused Argentina of manipulating GDP figures to avoid payment. After a lengthy legal battle, a UK court ruled in favor of the creditors in 2023, ordering Argentina to pay over $1.5 billion. Yet, as of this year, the country has not honored the judgment, prompting the funds to launch a global campaign to find and seize any Argentine assets abroad.
The emergence of the LIBRA meme coin—promoted by Milei and his close circle—offered a tantalizing new target. The funds argued that the millions generated by the digital token should be considered state property, and thus fair game for seizure. Their legal strategy hinged on convincing a U.S. court that LIBRA’s profits belonged to the Argentine State, not to private individuals. If successful, it would have marked a rare and stunning instance of cryptocurrency being used to satisfy a sovereign debt.
But Judge Rochon was unconvinced. In her ruling, as reported by El Diario, she found the evidence “insufficient to prove state ownership of the LIBRA funds.” Instead, she noted, the available documentation and testimony pointed to private control. “The millions generated by LIBRA could belong to Milei, his sister and Secretary General Karina Milei, or promoter Hayden Mark Davis,” the judge wrote. This conclusion, while frustrating for the creditors, has only deepened the controversy swirling around President Milei and his associates.
The funds’ failed gambit was more than just a legal setback—it drew pointed criticism from the bench. Judge Rochon accused the investment funds of engaging in a “fishing excursion,” using the power of the court not to pursue specific, relevant evidence, but to embark on what she described as a speculative investigation into the entire cryptocurrency operation. According to Infobae, she rejected the request for lack of credible evidence, suggesting that the funds were attempting to use the U.S. legal system to conduct what amounted to an open-ended probe into foreign affairs.
The ripple effects of this decision are significant. For one, it frustrates the creditors’ hopes of collecting on their hard-won UK judgment. The four funds—Palladian Partners, HBK Master Fund, Hirsh Group, and Virtual Emerald International Limited—have spent years and millions of dollars pursuing repayment, only to come up empty-handed once again. Their legal strategy, which included demanding extensive documentation from Meteora (the Solana platform that launched LIBRA) and seeking testimony from numerous individuals, ultimately backfired. Not only did they fail to secure the assets, but the court’s findings have now reinforced the theory that LIBRA’s profits are controlled by private actors, not the Argentine State.
For President Milei, the ruling is a double-edged sword. On the one hand, the decision means that the LIBRA funds cannot be seized to pay Argentina’s sovereign debt—at least not for now. On the other, it intensifies scrutiny over his personal role in the scandal. The judge’s suggestion that the funds could be controlled by Milei, his sister, or Davis only complicates his legal standing, especially as he faces a separate civil lawsuit from retail investors who claim to have lost $251 million due to the meme coin’s collapse.
That class-action suit, while legally distinct from the asset-seizure case, underscores the broader stakes. Retail investors allege that they were misled by the high-profile promotion of LIBRA, and they are seeking to hold Milei and his associates personally accountable for their losses. The U.S. court’s finding that the LIBRA assets likely belong to private individuals rather than the state could bolster their arguments, making it harder for Milei to distance himself from the fallout.
Meanwhile, the failed asset seizure highlights the growing complexity of international finance in the age of cryptocurrency. For decades, sovereign debt disputes played out in the world of traditional banking and state assets—think frozen bank accounts or seized diplomatic properties. Now, with the rise of digital tokens and decentralized finance, creditors are increasingly eyeing crypto holdings as potential sources of repayment. But as this case demonstrates, tracing ownership and establishing legal claims over such assets is anything but straightforward.
Judge Rochon’s ruling also sends a broader message to international litigants: U.S. courts will not be used as tools for speculative fishing expeditions, especially when the underlying dispute involves foreign states and complex questions of ownership. The decision sets a precedent that could shape future efforts to seize crypto assets in cross-border debt disputes, making it clear that credible, specific evidence is required before the courts will intervene.
For now, the LIBRA scandal continues to cast a long shadow over Argentina’s financial and political landscape. The meme coin’s meteoric rise and chaotic aftermath have ensnared some of the country’s most powerful figures and left investors, creditors, and the courts grappling with thorny questions of accountability and control. As legal battles continue on multiple fronts, one thing is clear: the intersection of cryptocurrency and sovereign finance is only getting messier—and the world is watching closely.
The latest U.S. court decision may have closed one door for creditors, but it has thrown open many others for investigators, investors, and political observers alike. The story of LIBRA, it seems, is far from over.
