'Memecoins are cooked' after $4B Libra scandal

The Libra (CRYPTO:LIBRA) memecoin scandal, involving Argentine President Javier Milei, has led to a crypto venture capitalist declaring that "memecoins are cooked."

Nic Carter, a partner at Castle Island Ventures, argues that the scandal exposed the "corrupt memecoin" sector, suggesting the end is near for this type of cryptocurrency.

Carter says that memecoins had been successful as a fairer alternative to high FDV VC-backed coins.

However, recent memecoin launches like LIBRA and celebrity-backed coins have been exposed as unfair.

He likened the situation to a casino heavily favoring the house.

The Libra token's launch was widely known among memecoin insiders before its rise and fall.

Jupiter Exchange reported finding no evidence of insider trading by its team.

The token, part of the Viva la Libertad project, was intended to boost Argentina's economy.

It quickly rallied after promotion by Milei on X, reaching over $4.50 before crashing within five hours.

This led to accusations of a pump and dump scheme.

Pump.fun founder Alon has called for enhanced protections on token launch platforms to ensure user safety.

Despite the controversy, some industry figures remain optimistic about memecoins.

Backpack founder Armani Ferrante views them as a "stress test" for the financial system's future.

Coinbase CEO Brian Armstrong suggests remaining open-minded, comparing memecoins to the early days of the internet.

However, data indicates a cooling interest in memecoins, with new tokens launched on Solana-based Pump.fun decreasing by 59% in the past month.

The Solana (CRYPTO:SOL) cryptocurrency has also seen a decline.

The scandal has impacted Solana's ecosystem, with its price declining by about 12% since the $LIBRA debacle.

Many investors now speculate that the "Solana casino" may have peaked, at least for the time being.

Kelsier Ventures reportedly pocketed over $110 million through liquidity provision and token sales.

After details of insider allocations and liquidity maneuvers became apparent, $LIBRA’s price collapsed.

Hayden Davis admitted to sniping a significant portion of $LIBRA’s supply alongside the project’s insiders and leveraging the $110 million proceeds for further negotiations.

“The people that benefit the most are the people that structure the deal,” Davis said.