Dormant LIBRA Wallets Wake Up to Buy 456,401 SOL, Fueling Fresh Scrutiny

Wallets connected to the LIBRA memecoin collapse — one of 2025's most notorious political crypto scandals — sat untouched for roughly nine months while holding $57.6 million. In November, those same addresses became active again, converting funds into Solana in a move that has drawn renewed attention from investigators and reporters alike.

According to on-chain tracking, the wallets executed a purchase of 456,401 SOL at an average price of $135 per token, rotating roughly $61.5 million out of stablecoins and into Solana. The transaction came just over three months after a federal judge released the frozen funds, having described the wallet holders as cooperative rather than evasive.

Prosecutors in both the United States and Argentina are reportedly working to trace the movement of these funds. Circle, which issues USDC and holds the technical ability to freeze addresses, has not issued any public comment.

Notably, Hayden Davis reportedly profited roughly $12 million from an early position in Kanye West's YZY token, a trade that took place just one day after a Manhattan federal judge released his previously frozen assets.

Credit for reporting and data referenced throughout: CoinTelegraph, CryptoNews, Decrypt, Sbaiti Law, Unchained, Bubblemaps, Bitcoinist, CoinMarketCap, BlockNews, Bitget, Tekedia, Circle, The Block, Solana docs, Yahoo Finance, MEXC, SDNY press release, IntelliNews, Buenos Aires Times, Diario Uno, Nansen, CoinDesk, Schulte, Roth & Zabel.

01The Unfreezing

On August 19, 2025, Judge Jennifer Rochon of the Southern District of New York lifted the freeze on $57.6 million in USDC connected to the LIBRA collapse. Her order noted that the defendants had cooperated with the proceedings, were not "evasive actors," and that money damages remained "available to compensate the putative class." Plaintiffs in the ongoing suit are seeking upward of $100 million in damages.

Keeping the freeze in place required plaintiffs to demonstrate irreparable harm. The judge was not persuaded, voicing "skepticism" about their odds of success before lifting the restriction.

Reactions from the defense followed quickly. Mazin Sbaiti, attorney for Davis, called it a vindication: "This ruling affirms what we have said all along - this case is meritless." Counsel for Ben Chow described the allegations as "untested and meritless," adding they looked forward to filing a motion to dismiss. Both men left the hearing with eight-figure stablecoin balances restored and a judicial finding favorable to their conduct.

The very next day, August 20, 2025, Kanye West's YZY memecoin went live. Bubblemaps tracking identified fourteen wallets that entered positions within a single minute of the launch announcement, having been funded from centralized exchanges the day prior. One of these wallets reportedly spent 129 SOL (roughly $24,000) in priority fees alone to gain queue priority at launch.

Per Decrypt's analysis, the Davis-linked wallet cluster deployed $2.8 million and extracted $12 million in total. Meanwhile, YZY itself fell 80% from a peak valuation near $3 billion, leaving an estimated 51,000 wallets holding $74.8 million in combined losses.

Only a single day separated the court's determination that Davis was not "evasive" from his cluster's next profitable trade.

02The November Move

Two wallets tagged by Nansen — "Defcy" (labeled Libra Deployer) and "61yKS" (labeled Libra: Wallet) — had shown no activity since February's rug pull involving the Argentine president. On Arkham, these addresses carry the labels Libra Deployer (DefcyKc4yAjRsCLZjdxWuSUzVohXtLna9g22y3pBCm2z) and Libra Squads Vault (61yKS9bjxWdqNgAHt439DfoNfwK3uKPAJGWAsFkC5M4C).

For nine months, neither address recorded a withdrawal, swap, or transfer. That changed on November 18. The LIBRA team first withdrew $3.94 million in USDC from its remaining liquidity pools — residual funds left from earlier cash-outs. Shortly after, roughly $61.6 million in USDC was converted into 456,401 SOL, at an average execution price of $135 per token.

The converted funds were then consolidated toward a new address: FKp1tEiy55hiAZs3RaYr8mj87U5ZcopB5aXgCPD8dNX7. Data from Lookonchain and Nansen, as reported by Tekedia, indicates that the funds settled into one or more Solana addresses following the swap; one wallet alone is said to hold 328,619 SOL, with the remainder spread across closely related addresses.

The choice of SOL over continued USDC holdings appears deliberate. Circle, USDC's issuer, retains the technical ability to freeze addresses and has exercised that power before — in Tornado Cash sanctions enforcement, OFAC compliance actions, and responses to law enforcement requests. Per Solana's own documentation, the FreezeAccount instruction applies only to SPL tokens whose mints are configured with a freeze_authority; native SOL held outside any SPL mint isn't subject to that mechanism. Solana's bridge ecosystem also offers deep liquidity across multiple established bridges, making SOL comparatively easy to move and convert.

Seen this way, the roughly $61.6 million shift from USDC into SOL reads less like routine portfolio management and more like a hedge against future freezes. Bybit has separately documented 16 blockchains capable of unilaterally freezing funds. The specific LIBRA-linked addresses in question had previously been frozen and subsequently unfrozen by court order, and now appear unrestricted despite continuing scrutiny.

Argentine authorities have separately frozen a portion of Libra-linked assets — $507,000 in total, a small fraction relative to the sums involved. The 456,401 SOL position remains unencumbered and traceable on-chain, though not currently subject to any freeze order.

03Where the Key Players Stand

Hayden Davis remains free and continues to trade actively. LIBRA is estimated to have generated roughly $100 million for those behind it. MELANIA added further gains, while WOLF eventually dropped 99% after extraction had already occurred, and YZY produced the $12 million profit noted above. Davis currently manages a nine-figure crypto portfolio on-chain, with no arrests to date.

Ben Chow resigned from Meteora in February. A class-action complaint filed in the Southern District of New York alleges the Meteora co-founder orchestrated a systematic fraud scheme, and a Jupiter co-founder reportedly characterized Chow's conduct as a "lack of judgment." Separately, records show Chow was convicted of insider trading in the Southern District of New York in 2018. He remains a named civil defendant with no new criminal charges filed.

President Javier Milei's approval rating fell to 45% following the LIBRA scandal, according to a national poll. The episode, referred to by some outlets as "Cryptogate," has not derailed his political standing — his party won the midterm elections — and he faces no legal exposure at this stage.

Mauricio Novelli and Manuel Terrones Godoy are described by Argentine prosecutors as central "crypto-to-fiat converters" in the scandal. A judge has frozen some of their assets and reportedly barred them from transferring property or vehicles. Investigators have requested their detention citing flight risk. Security camera footage allegedly shows Novelli's mother and sister leaving a Banco Galicia branch on February 17 with bags after accessing his safe deposit boxes; the contents and eventual destination of those items remain unknown. Neither individual has been detained.

Victims: Nansen puts total losses from LIBRA alone at $251 million, while Argentine prosecutors estimate the figure at $100-120 million. Factoring in MELANIA's decline, WOLF's collapse, and YZY's $74.8 million in retail losses, total compensation paid to victims stands at $0.

04Legal Status by Jurisdiction

• United States: Class-action litigation has been ongoing since May, with no trial date set and an uncertain outcome. Defendants' funds are unfrozen and freely movable.
• Argentina: A criminal investigation remains active, with zero arrests and $507,000 in frozen assets — a small amount relative to the funds extracted.
• Interpol: A Red Notice request for Hayden Davis was filed in March. Nine months on, it has not been issued, and Davis continues to operate and trade publicly.

Across four tokens — LIBRA, MELANIA, WOLF, and YZY — the same sequence has repeated: launch, extract, face investigation, repeat. So far it has produced zero arrests and only minor asset freezes relative to the amounts involved.

05Why the Pattern Persists

The gap between US civil proceedings and Argentine criminal proceedings illustrates the core problem. American courts have treated the matter as a civil dispute where monetary damages are considered an adequate remedy, and shortly after the $57.6 million freeze was lifted, the same defendants deployed $61.5 million into SOL during a market pullback. Civil process isn't ineffective so much as slow — discovery, depositions, and motions unfold over a timeline built for disputes between parties who aren't simultaneously moving assets across chains.

Argentina's criminal framework, by contrast, estimates losses at $100-120 million and has frozen $507,000 — a figure that matters procedurally but has little practical effect on-chain. Arrest warrants and extradition mechanisms depend on suspects being reachable, and Interpol Red Notices move through channels calibrated for conventional crime rather than blockchain-speed asset movement.

Circle's freezing capability illustrates the gap further: the company has frozen USDC tied to Tornado Cash and OFAC sanctions within days in the past, yet has issued no public statement regarding these specific addresses, which remain active.

Regulatory classification adds another layer. In early 2025, the SEC's Division of Corporation Finance issued a staff statement concluding that typical meme coins do not qualify as securities under federal law. That leaves buyers without securities-law protections, though general fraud statutes remain theoretically available. Combined with cross-border jurisdictional limits — US courts cannot enforce rulings in Argentina, and Argentine prosecutors cannot make arrests in the US — the result is a persistent enforcement gap.

06The Broader Pattern

Viewed sequentially, the four schemes appear to build on one another: LIBRA established that a presidential endorsement could drive a launch; MELANIA showed that First Lady branding could move markets; WOLF demonstrated that a project could launch while investigations were still underway; and YZY showed that trading could resume, profitably, immediately after a court unfreezes assets. Each round of extraction has effectively funded and informed the next, while each new investigation starts essentially from zero even as the targets operate with substantial capital reserves already in hand.

Nine months of dormancy followed by a sudden $61.5 million SOL purchase suggests the pause was less a retreat than a wait for legal clearance. Whether regulators and courts across jurisdictions can adapt enforcement speed to match blockchain transaction speed remains, for now, an open question — one this case has yet to answer in the victims' favor.