Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



One thing to note about Argentine President Javier Milei’s disastrous memecoin launch is that nothing about it was that unprecedented.



Every viral memecoin tends to pump before quickly losing value. So-called snipers have long been known to buy up new tokens before the broader public gets involved. Celebrities and “key opinion leaders” often engage with crypto on pay-to-play terms. Hell, two other presidents launched memecoins this past month.&nbsp;



When Melania Trump’s token pumped and dumped, the world moved on. Crypto doesn’t seem so willing to forgive and forget this time around. Maybe that&#8217;s because of how brazen the whole thing was.&nbsp;



LIBRA raced above $4 billion in market cap before dropping under $200 million in a matter of hours — a pump and dump far more drastic than, say, the MELANIA coin. After the fact, popular crypto figures spoke openly about trading on insider information. Barstool Sports CEO Dave Portnoy was <a href="https://blockworks.co/news/libra-memecoin-sausage-gross">allegedly refunded</a> the $5 million he put into LIBRA, a privilege not afforded to most traders who lost money.



And unlike the majority of celebrity memecoin launches, this one had real-world fallout attached. Most surprisingly, it was announced that Ben Chow, CEO of Jupiter-linked DeFi platform Meteora, chose to resign — although Chow and Jupiter’s pseudonymous CEO meow both maintain that he did nothing tangibly wrong apart from showing a “lack of judgement.” Meow said Jupiter would be hiring the tech law firm Fenwick &amp; West to investigate what happened.



Milei faces a lawsuit, Argentina’s stock market fell 5% after the opening bell yesterday, and SOL is down nearly 20% since Friday. KOLs started <a href="https://x.com/notthreadguy/status/1891635451011776953">issuing</a> mea culpas.



Crypto’s Twitterati is also very mad, and some are insistent that Solana needs to get back to focusing on constructive use cases like DePIN. It all feels a bit performative in the same way that investors and venture capitalists raced to explain why they never trusted Sam Bankman-Fried only after FTX went belly-up. I expect Kelsier Ventures CEO Hayden Davis — a LIBRA and MELANIA kingmaker who is doing a bizarre amount of media for someone accused of impropriety — to face some sort of legal action following all this collective ire.



But while lawyers will certainly rack up billable hours as a result of LIBRA, I doubt memecoin trading will take much of a hit. I asked Sphere CEO Arnold Lee whether he thinks the LIBRA fallout hints toward crypto finally drawing some sort of line on memecoins.



“An elephant never forgets, but crypto is not an elephant,” Lee said.



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Argentina

LIBRA jumped the shark

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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Kanye West. J.K. Rowling. Woody Allen. Some find it nearly impossible to separate art from artist.



Crypto markets are struggling with something similar about Solana. While there are all sorts of use cases for the chain that don’t have anything to do with highly manipulated memecoins, SOL is still getting punished for the LIBRA debacle — which all happened on Solana.



Since LIBRA insiders pumped and dumped the coin on Friday evening (supposedly to <a href="https://blockworks.co/news/libra-memecoin-sausage-gross">outsnipe the snipers</a> waiting to capitalize first), SOL has tanked by as much as 18%.



It’s rebounded slightly since but the damage is clear, especially considering BTC and ETH are mostly even over the same period. SOL now has a $83.4 billion market cap, just over half that of XRP.



Meteora is tied to both Jupiter — though it’s said that the two have been positioned independently over the past year — and LIBRA. JUP, the native token for Solana DEX aggregator Jupiter, has also shed as much as 24%.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfUhy5p_b413tBM0t9o3mP24arRq7RoOF69aRpkIrMs6t7Fu8LqA5aGJXM-U04MhEeZ5HkJMV-CNKnuJwntLu68XyoTTOEw38ZxYBYG3xpqUDSx75DuI_kPxu5i9wqopYuNI99ldA?key=NsXOV3_qihTu7KComdTDSng6" alt=""/></figure>



The chart above plots price action for six coins throughout the LIBRA launch starting almost two days earlier: TRUMP (orange), MELANIA (yellow), ETH (green), SOL (purple) and JUP (pink).



LIBRA’s market cap is otherwise shown by the blue area in the front.&nbsp;



What’s peculiar is that TRUMP, JUP and MELANIA rallied hard leading up to LIBRA’s sudden appearance, with the former reaching as high as 54% just four hours before LIBRA launched, and JUP as much as 17%.&nbsp;



Those trajectories changed one or two hours before LIBRA hit the chain and have been trending downward ever since the scandal broke out.&nbsp;



Jupiter, in a <a href="https://x.com/JupiterExchange/status/1891181433588470052">statement</a> on X, described plans to launch LIBRA as an “open secret in memecoin circles.” The team says it has conducted an internal investigation and found no evidence of insider trading.



We’ll probably never know if the pre-LIBRA pumps were coincidences. But it’s obvious that the market finds it all convenient enough to bundle them all together under one roof — the Solana memecoin complex, as Galaxy’s Thorn put it — and it’s indeed valued much lower than before, at least over the short term.



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Crypto market no longer able to separate memecoins from Solana

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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“I spread the word,” Argentine President Javier Milei <a href="https://www.bloomberg.com/news/articles/2025-02-18/milei-denies-wrongdoing-in-his-first-defense-of-crypto-debacle?embedded-checkout=true">reportedly said</a> in a TV interview yesterday defending his promotion of Libra.&nbsp;



Milei seems pretty set in denying any wrongdoing in the Libra fiasco, despite promoting the coin on his own social media and watching it tumble more than 90% overnight after briefly hitting a $4.5 billion market cap.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe8GIPSGkx-88qnIc7B2M--ZTy2yEKXlMz3dDSLktcioIoPm4QhaKSvVNN8xR7KbR5uu8blfXBBF4iR_Gd_ePp6KZXK7dIEsWcW1-3bhJD0TCg8CoYNqQQLTblQfXklzH5J37Zdeg?key=NsXOV3_qihTu7KComdTDSng6" alt=""/><figcaption class="wp-element-caption">A quick timeline for those of you who didn’t catch <a href="https://blockworks.co/news/libra-memecoin-sausage-gross">David’s write-up on LIBRA</a> Monday morning</figcaption></figure>



For Milei, who admitted he’s not an “expert,” the lack of judgment here is potentially career-damaging. And my use of “potentially” there is generous given Milei’s excuse that his specialty is “economic growth, with and without money.”&nbsp;



Monday morning saw the S&amp;P Merval index — the benchmark stock market index for Argentina — fall over 5%. Mind you, for the folks who don’t keep up with the Argentinian economy, it just <a href="https://www.ft.com/content/c92c1c71-99e7-49c1-b885-253033e26ea5">exited</a> a recession.



As Galaxy’s Alex Thorn pointed out, this is just the latest Solana memecoin debacle after TRUMP and MELANIA earlier this year. And that’s going to lead to some potentially painful questions.&nbsp;



“While a souring memecoin narrative had already begun following the liquidity suck caused by $TRUMP’s launch, the fallout from the $LIBRA launch and dump could result in further destruction of the memecoin complex, thus reducing the market’s need to hold SOL,” Thorn wrote in a note.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd6XO8BqFjXWswufoDMlmXxppNsvECbUIlxfQXhNhMR2STSkNYBZvEOrgjm9x8sAOmLXa_39Wpl6H5MiYXI67Wwk4c8tBTlPpoCjSMkYHUfH2Sz8DhwpQAVU10mO2VJ6js1zWN9yQ?key=NsXOV3_qihTu7KComdTDSng6" alt=""/><figcaption class="wp-element-caption">A look at SOLUSD</figcaption></figure>



This saga, however, has all the drama: A president in hot water, onchain data showing insider selling, and — as of late last night — an executive departure.&nbsp;



Ben Chow, co-founder of Meteora (which was used to create liquidity pools for LIBRA), resigned late Monday after the scandal.&nbsp;



Prior to Chow’s resignation, he said: “Meteora and I personally, have never received or managed any tokens on the side, do not receive knowledge or get involved with any offchain dealings, and we keep to the highest levels of confidentiality for any token launch happening on our platform.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">There have been questions regarding Meteora and my involvement in <a href="https://twitter.com/search?q=%24LIBRA&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$LIBRA</a>, so I want to explain our role and share why we work with 3rd parties. Meteora and I personally, have never received or managed any tokens on the side, do not receive knowledge or get involved with any…&mdash; benchow.sol (@hellochow) <a href="https://twitter.com/hellochow/status/1891341548115149190?ref_src=twsrc%5Etfw">February 17, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Meow, who founded Jupiter and co-founded Meteora, said he believes Chow’s statement that there wasn’t any “financial inappropriateness in dealing with partners” but that he had “shown a lack of judgment and care about some of the core aspects of the project.”



For Thorn, this is just the latest “sordid episode of Solana’s memecoin complex.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Hi, I’m meow from Jupiter, and I also cofounded Meteora. Firstly, I’d like to reiterate my confidence that no one at Jupiter or Meteora committed any insider trading or financial wrongdoing, or received any tokens inappropriately. Secondly, we are hiring an independent 3rd…&mdash; meow (🐱, 🐐) (@weremeow) <a href="https://twitter.com/weremeow/status/1891664435321647186?ref_src=twsrc%5Etfw">February 18, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Here’s the thing: There’s now a pattern of memecoin launches tied to political figures and I can’t be the only one watching it take place with discomfort.&nbsp;



There’s no denying that memecoins have had quite the run, but — as Thorn pointed out — this type of activity could just lead to the market reducing overall positions in SOL.&nbsp;



Which leaves me wondering: Where do we go from here?



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LIBRA’s the latest ‘sordid episode’ of Solana memecoins: Galaxy

Sebastian Sinclair

<div id="highlights-block_61f20829d7753" class="highlights">
 <ul>
 <li>The Diem Association is reportedly selling off its crypto infrastructure for a sum of $200M</li>
 <li>A holding company for crypto-focused bank Silvergate has picked up the ticket</li>
 </ul>
 
</div>



Facebook&#8217;s brief foray into crypto is reportedly coming to a close.



According to a report by the <a href="https://www.wsj.com/articles/facebooks-cryptocurrency-venture-to-wind-down-sell-assets-11643248799" target="_blank" rel="noreferrer noopener">Wall Street Journal</a> on Wednesday, the Facebook-led Diem Association&#8217;s blockchain and crypto infrastructure is being sold off to a Californian bank for around $200 million. 



Facebook, now known as Meta Platforms Inc., did not immediately respond to Blockworks&#8217; request for comment.



The bank, Silvergate Capital Corp., previously reached a deal with Diem to issue the association&#8217;s stablecoin, but those efforts were blocked by the Federal Reserve, <a href="https://www.bloomberg.com/news/articles/2022-01-25/zuckerberg-s-stablecoin-ambitions-unravel-with-diem-sale-talks?sref=ctSjKj2N" target="_blank" rel="noreferrer noopener">according to Bloomberg</a> reporting. 



Silvergate Capital is a holding company for its crypto-focused bank which provides financial infrastructure and services to digital asset participants.



The move is viewed as a means to return capital to its investor members. Facebook parent Meta Platforms Inc. owns around a third of the association, according to the reports. The other two-thirds belong to a consortium of the association&#8217;s members.



From the outset, the Diem project formerly known as Libra was derided and railed against over its plans to introduce a stablecoin — a crypto asset generally pegged to a commodity or fiat currency — to billions of users worldwide.



Meta unveiled the ambitious project back in June 2019, much to the chagrin of US regulators and politicians. The association was formed alongside payments giants PayPal, Stripe and Visa and also included a long list of some of the world&#8217;s largest companies.



Concerns were raised in Washington a month later when Facebook&#8217;s CEO, Mark Zuckerberg, had to explain to congress how the initiative wouldn&#8217;t undermine global finance. Following funding cuts to the project, as well as the Meta-owned Novi crypto wallet and regulatory pressure, development stalled.



Meanwhile, David Marcus, who oversaw Libra from the beginning as well as the development of Novi, quit Facebook in December citing a need to pursue his own personal projects.


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5679FF&#8221; assets=&#8221;FB&#8221; start_expanded=&#8221;false&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



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Diem

Facebook-led Crypto Project Diem to Be Sold Off for $200M: Report

Luke Conway

<div id="highlights-block_61f169ffc3148" class="highlights">
 <ul>
 <li>Meta’s Diem Association, formerly known as Libra, has been plagued by regulatory and social backlash</li>
 <li>The association n is seeking to sell assets to pay back investors, sources familiar with the matter reportedly say </li>
 </ul>
 
</div>



Meta’s (formerly Facebook) “Diem” stablecoin cryptocurrency project seems to be crumbling after years of social and regulatory pressures, Bloomberg <a href="https://www.bloomberg.com/news/articles/2022-01-25/zuckerberg-s-stablecoin-ambitions-unravel-with-diem-sale-talks" target="_blank" rel="noreferrer noopener">reported</a>. The project, formerly known as Libra, is reportedly seeking to sell its assets in order to return capital to investors and association members. 


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5679FF&#8221; assets=&#8221;FB&#8221; start_expanded=&#8221;false&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



Facebook’s Libra cryptocurrency was slated to launch in 2019, but backlash from regulators forced the association to hold off until it received appropriate <a href="https://www.banking.senate.gov/imo/media/doc/Marcus%20Testimony%207-16-19.pdf" target="_blank" rel="noreferrer noopener">approvals</a>. In October 2019, several companies, including PayPal, eBay, Mastercard and Stripe, left the Libra Association, increasing doubt that the project would ever work. 



In a <a href="https://www.theguardian.com/technology/2019/oct/07/paypal-pulls-out-facebook-libra-cryptocurrency#:~:text=It%20said%20in%20a%20statement,financial%20services%20for%20underserved%20populations." target="_blank" rel="noreferrer noopener">statement</a> from 2019, PayPal noted why it was leaving the project:



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;PayPal has made the decision to forgo further participation in the Libra association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.&#8221;</blockquote>



Since then, PayPal has made its own <a href="https://newsroom.paypal-corp.com/2020-10-21-PayPal-Launches-New-Service-Enabling-Users-to-Buy-Hold-and-Sell-Cryptocurrency" target="_blank" rel="noreferrer noopener">entry</a> into the cryptocurrency space, letting its users buy, sell and hold cryptocurrency on its platform. 



Concern over the Diem project stemmed from both Facebook’s history with data and also the fact that Libra would be a permissioned and private system that could potentially undermine existing monetary systems should it become popular. 



After so much backlash from regulators, the Libra Association <a href="https://www.diem.com/en-us/updates/diem-association/" target="_blank" rel="noreferrer noopener">changed</a> its name to the Diem Association in 2020, just as Facebook would later change its name to Meta after becoming synonymous with unethical data practices.



The new version of Diem would also depart from its prior concept of a stablecoin backed by the International Monetary Fund&#8217;s SDR, a basket of top currencies including USD, EUR, CNY, JPY and GBP, and instead use a USD-only backed stablecoin issued by a major bank. But Diem couldn&#8217;t seem to shake the regulatory and social pressures.



To add more uncertainty to the project, Diem&#8217;s head David Marcus, announced his departure from Meta and Diem through a series of Tweets in November of last year. 



<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Personal news: after a fulfilling seven years at Meta, I’ve made the difficult decision to step down and leave the company at the end of this year. (1/7)&mdash; David Marcus &#8211; dmarcus.eth (@davidmarcus) <a href="https://twitter.com/davidmarcus/status/1465740041339092994?ref_src=twsrc%5Etfw">November 30, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Sources say that it is unclear whether or not Diem will find a buyer for its assets, a third of which is owned by Meta.



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Is Facebook’s Diem Stablecoin Falling Apart?

Casey Wagner

<div id="highlights-block_611d2cd9fe2e8" class="highlights">
 <ul>
 <li>Facebook payments and stablecoin projects have been unfairly scrutinized, the head of Facebook Financial writes </li>
 <li>The tech giant says it will be at the forefront of revolutionizing the payments system </li>
 </ul>
 
</div>


<div id="highlights-block_611d2bd7fe2e5" class="highlights">
 
</div>



Facebook wants a ‘fair shot’ at rebuilding today’s broken payments system, according to David Marcus, head of the financial services branch of the technology company.&nbsp;



Facebook Payments, launched in 2009, has enabled more than $100 billion in payments volume, Marcus wrote in a <a href="https://medium.com/@davidmarcus/good-stablecoins-a-protocol-for-money-and-digital-wallets-the-formula-to-fix-our-broken-payment-f11f59fc92d7">memo Wednesday</a> about Facebook’s role in improving financial systems. The platform and Facebook’s other financial services projects, Marcus said, have faced unfair resistance from traditional financial players and regulators, but the company is ready to be taken seriously.&nbsp;



“I’ve repeatedly heard variations of the argument that the payments and financial services industry shouldn’t let Facebook be part of these innovations,” Marcus wrote. “I’ve heard multiple conversations about how this proposal would be so great if only Facebook wasn’t involved.”&nbsp;



The pushback Marcus refers to was largely centered around Novi, Facebook’s planned digital wallet that would allow for quick, and oftentimes free, money transfers. The tech giant intended to pair Novi with Facebook-initiated stablecoin project Libra, but ran into regulatory constraints. 



In 2019, former President Donald Trump said that Libra would lack “standing and dependability” and that stablecoins will never be recognized as ‘real’ currencies. European Central Bank board member Benoit Coeure also raised concerns in 2019 about Libra posing a threat to the US dollar supremacy.&nbsp;



The opposition has positioned the tech giant, with roughly 2.89 billion users as of the second quarter of 2021, as a dark horse, Marcus said.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“One of the core tenets of our value system is the promise of a level playing field,” Marcus wrote. “This idea that any person or company bringing a solid solution to a problem will have a fair shot.”</blockquote>



Facebook rebranded the Libra project as Diem following the opposition. Diem is now overseen by the Diem Association, a nonprofit group looking to address government and regulatory concerns.&nbsp;



“I understand and accept the need for extra scrutiny due to our scale,” Marcus wrote.&nbsp;



<h3 class="wp-block-heading">The regulatory approach</h3>



In May 2021, <a href="https://cms.blockworks.co/facebook-led-digital-currency-pivots-to-us-dollar-stablecoin/" target="_blank" rel="noreferrer noopener">Facebook announced a partnership</a> with Silvergate Capital where the bank holding company will be the exclusive issuer of Diem USD stablecoin. The move is largely seen as a way to appeal to regulators, some say.&nbsp;



“Libra had a fair amount of pushback, and subsequent to that, Facebook decided to say, ‘okay, we&#8217;re going to go to the regulatory approach, we&#8217;re going to we&#8217;re going to do everything by the book, we&#8217;re going to go get whatever state money transfer licenses we need with Novi,’” said&nbsp; Michael Del Grosso, research analyst at Compass Point Research and Trading. “And with Diem, as opposed to going to a less regulated stablecoin issuer, we&#8217;re going to go through a member of the Federal Reserve of California, a state-chartered bank, which is Silvergate.”&nbsp;



Facebook is a “challenger” in the financial payments industry, Marcus said. The Novi wallet will allow users to send and receive US dollars, Euros and other fiat currencies free of charge.&nbsp;



“So why not just do that and call it a day?” he wrote. “Well, we might.”



But Facebook isn’t quite ready to give up on the incorporation of stablecoins, Marcus said. A closed payments system using only fiat currencies is &#8220;not going to cut it,” he wrote. 



A secure, well-designed stablecoin truly backed one-to-one by fiat currency, a feature many <a href="https://cms.blockworks.co/more-capital-flowed-into-stablecoins-than-muni-bonds-in-2021/" target="_blank" rel="noreferrer noopener">projects today lack</a>, would offer consumers stronger protection and options in payments, Marcus said.&nbsp;&nbsp;



Facebook is committed to reaching this goal while adhering to regulations. The Novi wallet has licenses or approvals in most US states, Marcus said. Additionally, he said, the Diem stablecoin project “has addressed every legitimate concern.”



“Change is long overdue. It’ll happen one way or another. Novi is ready to come to market,” Marcus wrote. “It’s regulated, and we’re confident in our operational ability to exceed the high standards of compliance that will be demanded of us.”&nbsp;



Marcus’ statement, Del Grosso said, reflects the work Facebook has done and wants to show regulators.&nbsp;



“Facebook is trying to appease the regulators by playing their game,” Del Grosso said. “And I think that that&#8217;s what David is saying in this post today. He&#8217;s saying that they have gone out, done their homework, and they deserve their place in the marketplace today.”&nbsp;



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.