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LIBRA Scandal Escalates as Circle Freezes $57.5 Million in USDC Tokens

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  • LIBRA promoters’ wallets were frozen by Circle, locking $57.5 million USDC on the Solana blockchain.
  • Argentine and U.S. legal actions probably pushed Circle’s unprecedented asset freeze.
  • Centralized USDC control enables asset freezes, exposing risks in politically tied crypto projects.

Circle has frozen $57.5 million in USDC tokens tied to wallets associated with the controversial LIBRA meme coin promoters. The freeze targets two Solana blockchain wallets containing $44.59 million and $13.06 million respectively, preventing any sale or transfer of these assets.

The exact cause behind Circle’s drastic action remains unclear. Speculation points to ongoing legal troubles surrounding LIBRA promoters, involving both Argentinian criminal investigations and American civil lawsuits. Recent developments in both jurisdictions may have compelled Circle to initiate this unprecedented freeze.

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The LIBRA scandal, which erupted earlier this year, has heavily impacted the cryptocurrency industry and political circles due to its association with Argentine President Javier Milei. While the president remains under scrutiny, multiple LIBRA team members face serious legal challenges.

Circle’s Centralized Control Enables USDC Asset Freeze

Argentina’s judiciary and legislature have ramped up the investigations related to this scandal. Local media indicate this surge in pressure was the reason for the USDC assets to be frozen by Circle. While, President Milei might have to face severe consequences, but crypto founders aligned with LIBRA are in an exposed position.

In the meantime, Burwick Law has filed an American lawsuit in New York to target non-Argentinian participants in the LIBRA. This suit gained significant traction in federal jurisdiction last month. Since Circle is headquartered in New York, the U.S. legal development may have contributed to the decision to freeze the assets.

LIBRA Faces $58 Million USDC Closure

Circle’s power to freeze USDC tokens is a result of its central control over the process of minting and issuing. The company has a policy of blacklisting assets used in illegal actions. This is only the latest in the freezing of assets, as in the past, Circle also blacklisted wallets attributed to significant hacks, including the February $1.4 billion Bybit exploit.

This scandal underscores the growing power of centralized stablecoin issuers and the fragility of unregulated crypto ventures. It also highlights the increasing risks faced by crypto entrepreneurs when navigating projects tied to political figures. With nearly $58 million in USDC now locked, LIBRA’s future appears to be in jeopardy.

The LIBRA scandal continues to evolve rapidly. Regardless of who initiated the freeze, the action reflects a dramatic escalation in the enforcement measures facing controversial crypto initiatives.

Read More: Circle Seeks $624M in NYSE IPO as Stablecoin Adoption Hits New Highs

Milei Shuts Down LIBRA Task Force Amid Backlash Over Crypto Scandal

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  • Milei dissolves LIBRA investigation task force despite mounting pressure.
  • Opposition demands further investigation into Milei’s LIBRA involvement.
  • LIBRA’s collapse led to millions in losses, sparking legal probes worldwide.

Argentine President Javier Milei has officially dissolved the task force that was established to investigate the controversial LIBRA cryptocurrency scandal. This decision, announced by Milei and Justice Minister Mariano Cúneo Libarona on May 19, comes just three months after the creation of the task force. Milei promoted the cryptocurrency that crashed and led to massive loss of investor funds.

The Investigative Task Unit (ITU) was formed earlier this year, shortly after President Milei endorsed LIBRA on his official social media platform, X. The value of the cryptocurrency surged to $5 per token and reached about $5 billion in a market capitalization before it crashed, causing investors heavy losses. The task force intended to probe the possible role of Milei in LIBRA’s launch and crash, which many critics have likened to a pump-and-dump scheme.

Milei Shuts Down Investigative Task Unit (ITU)

The Argentine government declared that the ITU had completed its mandate and forwarded the collected information to the Public Prosecutor’s Office. However, the government has not disclosed the results or measures. Opposition has expressed concerns  and urged the parliamentary commission to further probe Milei’s actions.

Opposition has criticized the dissolution of the task force. They have requested the activation of an investigative commission to reveal the full details of the scandal. The case attracted a lot of attention across the world as well as investigations  in the United States and Spain.

LIBRA Collapse Leaves Investors in Losses

Milei’s reputation has suffered in Argentina, as the public opposed him. A survey reports that after the LIBRA fiasco, more than 50% of Argentinians don’t trust the president. However, Milei has denied ill-intentions in the crypto venture.

Blockchain data has revealed that over 15,000 wallets traded LIBRA and 86% of them reported losses. While Milei argued that local investors were not affected, the data shows that many Argentinians were hurt. The losses have raised concerns about the project and the role of insiders.

Milei Faces Increased Global Scrutiny

Even though the investigation into LIBRA is done, the legal process will continue. The scandal is under investigation from both international authorities and Argentine courts. Milei is still under pressure to explain his role in the collapse of the cryptocurrency.

However, the scandal has raised concerns about management and political involvement in crypto projects in Argentina.

Related Reading | Senate Pushes GENIUS Act Forward, Will It Reshape Crypto Forever?

Hayden Davis Launches $WOLF Token Amid Legal Storm and Scandal

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  • $WOLF token rises to $40M market cap before sudden collapse.
  • Davis linked to past scams $LIBRA and $MELANIA, causing losses.
  • Regulators and investigators warn about the risks of Davis-backed tokens.

The controversial cryptocurrency investor Hayden Davis has launched a new token, $WOLF. He launched $WOLF despite the current legal problems and the Interpol Red Notice about his participation in previous token scams. The WallStreetBets community first promoted the token, and its market capitalization then surged to $40 million.

LIBRA Founder Launches WOLF token on the Run

The $WOLF token collapsed after what seems to be a rug pull scam. The on-chain data revealed that 82% of the entire token supply was located in specific wallets, which indicated potential insider manipulation. The distribution and ownership pattern of the token raised doubts about its authenticity, which made people believe that the project was another fake scheme by Davis.

Apart from $WOLF, Davis led the development of two additional controversial crypto projects called $LIBRA and $MELANIA. The two tokens $LIBRA and $MELANIA experienced substantial losses, where $LIBRA lost $99 million when its operator performed an alleged exit scam. Davis has developed and promoted tokens that later vanished and caused substantial financial losses to investors.

The collapse of $LIBRA prompted Argentine attorney Gregorio Dalbon to request an Interpol Red Notice for the arrest of Davis. The prosecutors initiated legal proceedings to prosecute him because of his involvement with the $LIBRA token collapse. However, Davis maintains active involvement in the cryptocurrency market, where he releases new tokens and maintains an active online presence.

The blockchain analytics company Bubblemaps has teamed up with investigator Coffeezilla to monitor Davis’s activities. Their research discovered Davis’s connection to $WOLF even though he tried to hide his real identity. The discoveries of Davis’s continued influence in crypto spaces have raised concerns about potential harm to investors.

$WOLF Raises Concerns in the Crypto Community

The launch of $WOLF has raised concerns from cryptocurrency regulators and market participants around the world. The history of token manipulation and market schemes linked to Davis intensifies doubts about $WOLF’s long-term sustainability. The current situation exposes the difficulties that regulators face in regulating decentralized cryptocurrency markets and the need for improved regulatory guidelines.

The cryptocurrency community remains divided about the proper action against individuals such as Davis. Some believe the absence of regulation creates barriers to preventing such fraudulent activities. Others suggest that increased enforcement of current laws would prevent future fraud attempts.

Investors should proceed with extreme caution when dealing with controversial cryptocurrency projects linked to figures like Hayden Davis. The $WOLF launch reminds investors about the importance of due diligence prior to investment decisions. The cryptocurrency market needs transparency and accountability to enhance long-term success and sustainable development.

LIBRA Scandal: Argentina’s Chief Prosecutor Hunts Milei’s $100M Crypto Trail

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The LIBRA scandal took a new turn as Argentina’s Chief Prosecutor Eduardo Taiano stepped in. Cracking the whip, Taiano ordered the freezing of approximately $100 million in digital assets connected to the sale of $LIBRA tokens.

The meme coin fiasco, involving Argentine President Javier Milei, shot up in price after he endorsed it publicly. Milei also retweeted a tutorial on how to buy the Solana-based token. This promotion sent the price soaring to $4.56 billion before plummeting to $257 million, leading to investor losses of roughly $250 million.

The case has been dubbed Cryptogate with The Economist calling it the “first big scandal” of Milei’s presidency.

Milei continued to remain defiant, in the face of fraud charges for his involvement in the token’s promotion. Argentine lawyers has raised serious concerns about its legitimacy and the potential impact on the national stock market.

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LIBRA Scandal: Argentina's Chief Prosecutor Hunts Milei's $100M Crypto Trail 3

Amidst growing clamour against Milei’s actions, Argentina’s Chief Prosecutor Taiano has now requested detailed transaction records related to the $LIBRA coin project and the deleted social media posts. This is seen as attempts to recover key evidence as Milei and his associates deleted the posts.

LIBRA Creator’s Damning Messages Expose Milei Family Payments

Apart from that, Hayden Davies, the creator of the meme coin, is also under scrutiny for his role in the incident. On-chain sleuths exposed messages between Davies and an anonymous businessman that revealed money was paid to President Milei’s sister in exchange for political favors.

As reported by TronWeekly earlier, the leaked message showed Davies asking the businessman: “SEND $$ to MILEI’S SISTER and he will sign and DO WHAT I WANT.” Such revelations have sparked impeachment discussions as well as bribery accusations and political manipulation within the crypto sector.

While the nation’s financial watchdog, the National Securities Commission (CNV), recently decided against intervening in the LIBRA case, authorities are tightening oversight as concerns over crypto-related financial activities grow. This move signals increased scrutiny on digital assets in Argentina.

LIBRA’s Political Deals EXPOSED: ‘Do What I Want’ Message Leaks

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  • LIBRA creator Davies allegedly sent payments to President Milei’s sister in exchange for political favors, leaked messages reveal.
  • President Milei dismisses LIBRA investor losses, comparing them to casino gambling while denying promotional involvement.
  • Investigators examine potential abuse of power as scandal reaches President’s inner circle, focusing on sister Karina’s role.

LIBRA fiasco deepens as allegations of corruption reach the highest levels of Argentina’s government. At the center of the drama is Hayden Davies, creator of the meme coin who is also a key figure in Milei’s crypto cabinet. Onchain sleuths exposed messages between Davies and an anonymous businessman that revealed money was paid to President Milei’s sister in exchange for political favors.

The leaked message showed Davies asking the businessman: “SEND $$ to MILEI’S SISTER and he will sign and DO WHAT I WANT.” Such revelations have fueled debate about accusations of bribery and political manipulation within the crypto sector.

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LIBRA's Political Deals EXPOSED: 'Do What I Want' Message Leaks 5

As the scandal unfolded, Milei remained defiant, refusing to acknowledge any wrongdoing in the LIBRA memecoin controversy. In a public statement, he dismissed investor losses, saying, “If you went to a casino and lost money, what’s the complaint?” His statements have drawn sharp criticism, with many calling for accountability in the handling of the meme coin fiasco and its alleged ties to high-ranking officials.

Milei Claims ‘Didn’t Promote LIBRA, Just Spread It

Despite mounting evidence, Milei continues to downplay his role in LIBRA’s promotion. When questioned about his involvement, he argued, “I didn’t promote it, I spread it… I used my personal account.” However, critics point out that as a sitting president, any public endorsement can significantly impact financial markets and investor sentiment.

Tensions further escalated during a recent interview when Milei’s lawyer abruptly intervened, preventing further questioning on the matter. The sudden disruption has only intensified speculation about the administration’s potential entanglement in the LIBRA case.

With increasing legal scrutiny and opposition forces demanding transparency, the LIBRA scandal is quickly becoming a political crisis. Investigators are now examining whether Karina Milei’s involvement constitutes an abuse of power, while international regulators amounts to violations of financial laws.

Solana DEX Meteora Scrambles for Damage Control After LIBRA Fallout

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Ben Chow, associated with Solana DEX Meteora, has reportedly stepped down in the wake of the Libra scandal. His resignation was notified by Meow, the pseudonymous co-founder of both Meteora and Jupiter. Chow issued an apology and denied personally receiving or managing LIBRA and MELANIA outside of their platform, maintaining strict confidentiality.

Chow clarified that Meteora’s involvement with LIBRA was only limited to providing technical assistance. He acknowledged a mistake in not prioritizing a user-friendly launch product, leading to excessive “hand-holding. He also admitted referring deployer/market-maker Hayden Davis of Kelsier Ventures to projects, including the MELANIA team, and providing IT support.

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Source: TradeDucky

Meow, co-founder of Jupiter and Meteora, also took to X to address Ben Chow’s apology and the ongoing LIBRA/MELANIA controversy. He reiterated that no insider trading or financial wrongdoing occurred within Jupiter or Meteora.

To ensure transparency, the DEX has hired a reputable law firm Fenwick & West, to conduct an independent investigation and publish the findings. Meow expressed support for Ben Chow’s statement, believing in his integrity regarding financial dealings.

Meow further emphasized Jupiter’s commitment to token transparency, citing three audits and a policy of no OTC token sales. He highlighted Jupiter’s non-extractive approach, low fees, and reinvestment in the Solana ecosystem.

Meteora vs. Solana DEX Downturn: A Volume Surge Amidst Declines

Meanwhile, the controversies surrounding LIBRA and MELANIA likely created significant volatility and speculative trading opportunities. Traders might have flocked to Meteora to capitalize on these price swings, leading to increased volume.

As reported by TronWeekly, Raydium and Orca, two leading Solana-based DEXs, have recorded substantial declines in trading volume over the past week, with drops of 39.16% and 41.42%, respectively.

Notably, Meteora, was among the handful of DEXes to buck the trend and record an 18.65% increase in trading volume. Even though the founders have denied any wrongdoing, the speculation of insider trading could have likely led to a large amount of trading volume. Traders could have been attempting to get in or out of positions based on rumors and speculation.

LIBRA and MELANIA Meme Coins: Same Team, Different Names?

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  • Argentine President Milei faces fraud charges for promoting the “LIBRA” memecoin.  
  • “LIBRA” scandal links to “MELANIA” memecoin, sparking concerns about scams.  
  • Solana-based meme coins face skepticism amid the “LIBRA” controversy.

The “LIBRA” meme coin scandal, involving Argentine President Javier Milei, has triggered widespread discussion in the crypto world. Milei not only endorsed but even retweeted a tutorial on how to buy the Solana-based token. This promotion sent the price soaring followed by a dramatic collapse, causing massive losses for investors.

As a result, Milei now faces fraud charges for his alleged involvement in the token’s promotion. Argentine lawyers raise serious concerns about its legitimacy and the potential impact on the national stock market.

The “LIBRA” fiasco has also drawn attention to the broader Solana ecosystem. There has been an intense debate on the viability of Solana-based meme coins, with many expressing skepticism and concerns about potential scams and extreme price volatility.

LIBRA
LIBRA and MELANIA Meme Coins: Same Team, Different Names? 8

On top of this controversy, the “MELANIA” meme coin, named after the first lady of the United States Melania Trump, has now been linked to the “LIBRA” scandal. Analysts at Bubblemaps revealed that both tokens were launched by the same team, sparking outrage among investors and raising red flags about potential scams and insider trading. The ongoing investigation into these tokens highlights the inherent risks associated with meme coins in the cryptocurrency market.  

Amidst these debates, comparisons with Ethereum have emerged, with some investors suggesting a shift in strategies.

LIBRA Aftermath: Ethereum’s Rise, Fort Knox Scrutiny, and Storj’s Gains

Ethereum ($ETH) is in the spotlight due to discussions about its market upswing and its prominent position alongside Bitcoin and Binance Coin. Users actively discuss Ethereum’s price fluctuations and market sentiment, reflecting heightened interest in the second-largest cryptocurrency.

Additionally, discussions around Fort ($FORT) are also trending, fueled by calls for transparency regarding Fort Knox’s gold reserves. Elon Musk’s involvement has amplified these calls, leading to speculation and humorous takes on the legitimacy of the gold holdings.

Finally, Storj ($STORJ) is experiencing a surge in market value, with bullish sentiments and discussions about potential gains dominating social media platforms.  

The “LIBRA” scandal, however, remains the central focus, underscoring the importance of due diligence and caution in the volatile cryptocurrency market.  

Binance’s CZ Says No LIBRA, Sticks to BNB & BTC

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  • Binance CEO CZ donates 150 BNB ($100,000) to victims of the “LIBRA” scam.
  • He reiterates his holdings are primarily BNB and Bitcoin.
  • CZ clarifies he didn’t invest in “LIBRA” and prefers long-term impact over short-term gains.

Binance ex CEO, Changpeng Zhao, popularly known as CZ, made waves after he donated 150 BNB, worth $100,000, to help victims of the recent “LIBRA” scam. The donation, first revealed by an X user, was met with positive reaction, with many calling for more industry leaders to follow CZ’s example and provide support during times of crisis.

CZ, however, clarified that a university student first proposed the idea, and he simply followed through. He also emphasized that he had not invested in the “LIBRA” token. “I don’t buy new coins,” CZ stated, highlighting his preference for established cryptocurrencies with proven track records. He cited his “late” entry into Bitcoin at $600 as an example of his long-term investment strategy.

The top exec also revealed his investment approach, emphasizing his focus on long-term impact rather than short-term gains. “I am not short-term opportunistic,” he declared, highlighting his commitment to projects with lasting value. He confirmed that his primary holdings consist of BNB and Bitcoin.

I, of course, did not invest in $libra. I don’t buy new coins. (I got into bitcoin “late”, not when it first came out in 2009. I bought bitcoin at $600) I am not short-term opportunistic. I look for long-term impact. I hold BNB and BTC.

CZ Steps Up, Milei Steps Back

The donation comes at a time when the crypto space is grappling with the aftermath of the “LIBRA” scam, which left many investors with significant losses.

For those new, Argentine President Javier Milei is under investigation for promoting the little-known cryptocurrency, whose price surged and then crashed leading to losses for thousands of investors. As reported by TronWeekly, he then deleted the message and, refused to have any ties to the initiative.

CZ
Source: Mando

“I was not aware of the details of the project and after having become aware of it I decided not to continue spreading it,” he wrote on his post.

In this regard, CZ’s gesture not only provides support to the victims but also sends a powerful message about the importance of community and responsibility within the cryptocurrency industry.

LIBRA Token Crash Sparks Fraud Allegations Against President Javier Milei

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  • LIBRA token’s value collapsed by over 94% after Argentine President Javier Milei deleted his endorsement post, sparking fraud allegations.
  • Milei faces criminal charges, including fraud and price manipulation, linked to the alleged pump-and-dump scheme.
  • Amid legal turmoil, Milei requested an anti-corruption investigation, denying direct ties to the LIBRA project despite meeting with its tech consultants.

Argentine President Javier Milei is accused of criminal conduct in promoting cryptocurrency that skyrocketed and collapsed within days, triggering allegations of a pump-and-dump scheme. The scandal concerns the Libertad project native token, Libra (LIBRA), built on the Solana blockchain.

February 14, LIBRA jumped to a market cap of $4.56 billion after Milei backed it on his social media account on X (former Twitter). The euphoria, however, was short-lived. When Milei deleted his post, the token’s value dropped by over 94%, leading to collective financial loss to investors. The crash has led to allegations of price rigging and fraud.

Prominent Argentine lawyers Marcos Zelaya and Jonatan Baldiviezo, engineer María Eva Koutsovitis, and economist Claudio Lozano have filed a criminal complaint against Milei. They allege that he is an accomplice to fraud and that his endorsement was pivotal to the scheme.

Baldiviezo also accused President Macri of violating Argentina’s Public Ethics Law, where officials are compelled to submit declarations of assets that belong to them and interests that could result in a conflict of interest. “Within this criminal group, fraud had been committed, where President Macri’s actions were key,” Baldiviezo stated.  

The Associated Press reported that on February 17, the case will be assigned to a judge or referred to a prosecutor for further investigation.

Milei Faces Legal Turmoil Amid LIBRA Token Scandal

Following up on Milei’s legal issues, Argentine lawyer Agustín Rombolá, of law practice Rombola Mangione and political movement Unión Cívica Radical, brought an independent legal complaint. Rombolá accused Milei of fraud, negotiations unbefitting of a public office, rigging of prices, and financial crimes.

Rombolá also revealed plans to initiate a class-action lawsuit on behalf of investors who lost money in the LIBRA collapse.

Despite growing criticism, President Milei called on Argentina’s Office of Anti-Corruption to audit each government official, including himself, to determine if there had been any illegality. The President’s office claims that Milei was not aware of the project’s specifications upon its approval but claims that he was not immediately connected to the company that created the token.

Milei admitted to the meeting on Oct 19 with representatives of the tech consultancy company KIP Protocol, which is linked to the project. The AI-based payment infrastructure company KIP Protocol confirmed that it had facilitated the disbursal of project funds to domestic businesses. Still, it asserted that it had neither created the token nor served as a market maker.

Concerns that the project is unlawful were triggered after researchers discovered that Libra’s internet domain had only been created hours before its token’s launch date without visible ownership information. Opposition legislator Leandro Santoro has seized on the situation, vowing to impeach Milei, escalating the political crisis.

With legal troubles accumulating and possible impeachment on the horizon, Milei’s administration is at a crossroads. The emerging scandal underscores cryptocurrencies’ growing might and volatility in global financial markets and politics. With continuing inquiry, the incident clearly shows the risks of political endorsement within cryptocurrency. Global financiers and policymakers will watch closely as Argentina navigates this intense legal battle.

Related | Bitcoin (BTC) Eyes a Breakout Above $99,500 as Whales Accumulate and DXY Weakens

Libra Association Hires Former Banking Regulator as General Counsel for Payments Subsidiary

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The Libra Association, which was formed to oversee the company’s digital currency initiatives, including the digital currency Libra, announced hiring a former banking regulator and industry veteran as general counsel for its payments subsidiary. According to its official release, the association announced the appointment of Saumya Bhavsar for the position of General Counsel of Libra Networks, which is a wholly-owned subsidiary of the Association.

Bhavskar had previously worked within top U.S. and EU banks and regulatory agencies where she reportedly led legal teams that advised on and ensured compliance with cross-border regulations, settlement agreements with US authorities as well as significant merger transactions. Most recently, she served as a Managing Director, Global Head of Regulatory Affairs, and Group Head of the Data Protection Office at Credit Suisse for three years.

Following the development, Bhavskar stated,

“I am thrilled to be joining the Libra Association as it progresses toward enabling a more inclusive global financial system. Along with many in the banking industry, I have been watching the Libra project from afar and believe the Libra payment system is poised to transform the industry and enable unprecedented financial innovation and inclusion at a time when we need it most.”

Bhavsar’s two decades of experience in banking regulation across the public and private sectors, extensive knowledge of banking, securities, and privacy laws and regulations would be crucial for the Facebook-backed project that has been facing regulatory headwinds at seemingly every turn.

Libra Association, the independent member organization building a blockchain-powered payment system to advance financial inclusion and financial services innovation, was established back in 2019. The project has had a rocky start. Its association with the Mark Zuckerberg-led social networking site further proved to be damaging taking given Facebook’s history of selling users’ data without their knowledge. It faced extreme scrutiny from regulators, politicians, and potential users.

Recently the European Central Bank has warned that financial stability and data privacy could be under threat from digital currencies issued by giant technology companies such as Facebook’s Libra. Despite the backlash, it is important to acknowledge that the proposed permissioned blockchain-based payment system did prompt the central banks to wake up to central bank digital currencies [CBDCs]