Millions of dollars in cryptocurrency linked to the collapsed Argentinian “memecoin” $LIBRA are being moved from secure digital wallets, prompting a new emergency legal effort to prevent the funds from disappearing. Approximately $9 million has been transferred in recent days from wallets labeled “Milei,” raising the specter of a “digital kill switch” to obscure the remaining $94.5 million potentially lost by investors [[1]]. The transfers follow months of inactivity adn escalating legal challenges surrounding the cryptocurrencyS launch and subsequent implosion, which has fueled scrutiny of its ties to political figures [[2]] and led to meaningful investor losses [[3]].
Approximately $9 million in cryptocurrency has been moved from digital wallets associated with the $LIBRA “memecoin,” raising concerns as legal action intensifies over the potential disappearance of $94.5 million in funds. The transfers, detected after a nine-month period of inactivity, come as lawyers seek a court order to prevent the funds from being obscured through complex anonymization techniques.
The movement of funds began on February 15th, according to expert Fernando Molina, who identified a transfer of 69,000 SOL – a highly liquid cryptocurrency equivalent to roughly $9 million – from a “multisig” wallet labeled “Milei” to other, less transparent wallets and platforms. A “multisig” wallet requires multiple approvals to execute transactions, adding a layer of security, but also complexity in legal proceedings.
The transfers are occurring as a legal team in Manhattan has requested an emergency order to block the potential conversion of traceable funds into privacy-focused cryptocurrencies like ZCash, which are designed to eliminate any record of origin or destination. The request, filed with Judge Jennifer Rochon, argues that those behind $LIBRA are on the verge of enacting a “digital kill switch” to hide the assets.
The legal action stems from the launch and subsequent collapse of $LIBRA on February 14th. Following the coin’s implosion, Hayden Davis, described as an “entrepreneur” involved with the project, claimed in an interview that the funds belonged to “the Government of Argentina” or even “Argentina” itself. The cryptocurrency’s rapid rise and fall drew significant attention, particularly given its association with political figures.
Documents submitted to the court by the law firm Burwick Law detail a “proof of concept” test conducted on November 16th, where $1.36 million in tokens were converted to SOL and then transferred to a shielded ZCash address within two minutes, effectively making the assets untraceable. Perit David Goldman stated, “The trail ends and the assets become permanently untraceable.”
More recently, on Tuesday, wallets identified as “Exit Wallet 1” and the “Deployer” of $LIBRA began converting substantial positions in the stablecoin USDC to SOL, a move often used as a precursor to transferring funds off easily monitored blockchains. “Exit Wallet 1” executed 37 transactions totaling $44.6 million, while the “Deployer” wallet converted another $17 million.
The transactions were coordinated, requiring simultaneous digital approval from at least two of three authorized operators of the scheme, due to the multi-signature nature of the “Exit Wallet.” This structure suggests a deliberate effort to move funds quickly and discreetly.
Lawyers representing Hayden Davis and Benjamin Chow dismissed Burwick Law’s arguments as “fallacious,” asserting they were merely reiterations of previous, unsuccessful attempts to freeze the funds. Judge Rochon had previously denied similar requests.
The latest developments include activity from the “multisig” wallet labeled “Milei,” which transferred funds to a wallet identified as “oHtMM.” That wallet then moved the money in smaller increments (200, 600, 700 SOL) to 2B7NY, converting them to USDC and sending them through deBridge to another blockchain, further obscuring their trail, according to Molina. “This is the first time we’ve seen money leave the ‘multisig’ wallets,” he noted.
