The Liberty Dollar is not legal tender and its creators have never claimed that it was. Black's Law Dictionary defines legal tender as "the money (bills and coins) approved in a country for the payment of debts, the purchase of goods, and other exchanges for value." What that means is you cannot pay your taxes with Liberty Dollars and no one is required to accept Liberty Dollars as a payment of debt.
However, there is nothing in the U.S. Code or the Constitution that prohibits citizens from bartering. For example, if I offer you a toaster in exchange for a coffee maker, and you agree, the government cannot prevent the transaction from taking place.
In essence, that is how the Liberty Dollar works. If I offer you 20 Liberty Dollars (i.e., $20 worth of precious metal) in exchange for the same coffee maker, and you agree, the government cannot (or at least should not) interfere. We are simply making what each of us believes is a fair trade.
The federal raid on the Liberty Dollar headquarters in Evansville, Indiana, is an assault on liberty. First of all, it is the latest example of how the government cracks down on perceived competition. Secondly, it shows just how fragile the U.S. fiat currency really is. The last thing the private bankers in charge of the nation's money supply want is for people to realize that the "legal tender" they are supposed to be using is completely worthless. Finally, if the U.S. dollar is undermined, there will no longer be an endless stream of it to finance the welfare-warfare state.
So, you can see why the feds are taking this "threat" seriously.