Circle froze $57.5 million in USDC tokens from wallets associated with LIBRA promoters. It’s unclear if this was caused by Argentinian criminal prosecution or American civil suits, as both have made recent progress.
Whatever happened, this act represents a severe loss for LIBRA’s team. Top-level Argentinian government officials like President Milei may or may not face serious consequences, but crypto entrepreneurs have fewer protections.
Circle Freezes LIBRA Assets
The LIBRA debacle from this February was a major scandal in the crypto industry, allegedly involving a sitting head of state. Although President Milei is personally under scrutiny, many LIBRA promoters are also facing charges.
Earlier today, Circle froze $57.5 million in the LIBRA team’s USDC holdings, representing a significant escalation.
Circle Freezing LIBRA Assets. Source: Etherscan
Circle, one of the biggest stablecoin issuers, has frozen user assets on many occasions other than LIBRA. And yet, at the moment, it’s unclear what caused the firm to take this drastic step.
Argentina’s legislature and judiciary are both investigating the scandal, leading some local journalists to conclude that this scrutiny forced Circle’s hand.
However, there is also a competing narrative that seems credible. Argentina’s charges against LIBRA promoters are very serious, but Circle is an American company.
It’s headquartered in New York City, where Burwick Law is filing a civil suit against non-Argentine LIBRA participants. Burwick’s suit recently moved to federal jurisdiction and is making more progress already:
In other words, this US-based federal suit may have encouraged Circle to freeze LIBRA promoters’ USDC. So far, Circle hasn’t made a statement, and none of the parties have officially taken credit for the move.
There isn’t any concrete evidence to confirm either theory yet.
Indeed, it’s very possible that both or neither of these legal battles moved Circle to act. Regardless of what happened, the outcome is the same: the noose is tightening for LIBRA’s promoters.
Whether Argentina’s top government officials will face criminal consequences or not, private crypto entrepreneurs have far fewer protections.
