Jupiter Refutes Claim of Insider Trading as LIBRA Memecoin Saga Prolongs

As the LIBRA memecoin saga escalates, every major party involved is taking a significant hit. The popular Solana-based decentralized exchange Jupiter is among those affected by the cataclysmic downfall of the so-called Argentine coin.

In a recent tweet, Jupiter’s founder, Meow, denied allegations of insider trading and hired an independent law firm to review its trading practices. The project’s founder believes this will help to clear its name and reassure investors amid looming regulatory scrutiny.

For context, insider trading involves trading a particular digital asset based on non-public, confidential information possessed by an individual or group of people. This act is illegal in many countries and is punishable by the law in such lands.

Jupiter Denies Insider Trading Claims

Following LIBRA’s launch on February 14th, users accessed the Solana-based memecoin through Jupiter. Days later, reports spread across the internet that some Jupiter executives used confidential information to gain early access to the meme token. Some accused Jupiter of possible involvement, claiming the project either manipulated the market or had prior knowledge of the token’s collapse.

Clearing every misconception, Meow stressed that no Jupiter or Meteora team member committed insider trading or received tokens inappropriately. He added that Fenwick & West, a United States-based law firm, will independently investigate the matter and publish a report.

Meanwhile, Jupiter’s native token, JUP, has dropped 12% in the past 24 hours to $0.74 at press time. Users are also likely selling their JUP holdings as the token’s daily traded volume rose to $347.4 million, representing over 40% in the past 24 hours.

Meteora’s Involvement

Ben Chow, the co-founder of Meteora, a Solana-based decentralized lending and borrowing protocol, was also accused of profiting from the LIBRA memecoin before its downfall. This speculation likely sprung from Jupiter’s announcement on February 16th that Chow was informed of the meme token’s contract address minutes before its debut for verification purposes.

Although Meow and Chow co-founded Meteora, the Jupiter founder stated in a recent tweet that Meteora had operated independently of him and Jupiter for over a year. Still, Meow expressed conviction that Chow was not guilty of the claims against him involving LIBRA.

Amid mounting pressures around the LIBRA issue, Chow resigned from leading Meteora. While announcing his resignation, he added that neither he nor the team at the decentralized lending protocol receive tokens “on the side.”

LIBRA: A $4.5B Memecoin Flop

The Jupiter and Meteora teams shed insights into how LIBRA’s rise and fall story began. About two weeks ago, a few Jupiter team members received the information from Kelsier Ventures, a firm that provides token issuance services, that a cryptocurrency tied to the Argentine government would launch.

Meteora’s co-founder explained that whenever non-crypto natives like celebrities or politicians launch a token, they employ the services of deployers or market makers. Chow added that he recommended Kelsier Ventures to those behind MELANIA, a memecoin that saw a significant price decline shortly after launch. Admitting that he received prior knowledge of an Argentine token weeks before its debut from Hayden Davis of Kelsier Ventures, Chow stressed that it was solely for “IT support.”

On February 14th, shortly after its debut, Argentina’s president, Javier Milei, endorsed the cryptocurrency. This endorsement was soon accompanied by a significant surge in the memecoin’s market capitalization to as high as $4.5 billion. However, the surge was short-lived, as the token’s value plummeted overnight, erasing more than $4 billion in market value. As of this writing, the memecoin has a market cap of $76.5 million.

Speculation quickly arose as the sudden crash sent shockwaves through the crypto community with suggestions that market manipulation contributed to the devaluation.

Many in Argentina push for Milei’s impeachment as the controversy grows, arguing that his endorsement misled investors. Meanwhile, financial regulators are investigating whether any fraudulent activities contributed to the decline of the $LIBRA token.

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