Circle froze nearly $58 million in USDC linked to the Libra meme coin following a federal court’s temporary restraining order.
The Libra token’s rapid rise and collapse led to accusations of pump-and-dump, criminal charges against Argentina’s President.
The freeze coincides with Circle’s NYSE IPO filing, emphasizing the stablecoin issuer’s control.
Stablecoin issuer Circle froze nearly $58 million worth of USDC held in Solana wallets connected to the controversial Libra meme coin team. This action followed a court order amid ongoing legal disputes tied to the token, which had previously sparked political controversy in Argentina.
https://twitter.com/arkham/status/1927801316178546958 USDC Wallets Frozen Following Court Order
Two SOL-based wallets linked with the Libra token team now has USDC balances of approximately $44.59 million and $13.06 million respectively that is on hold. Following this development, these funds can no longer be transferred or sold. Circle, the issuer behind the USDC stablecoin, exercised its authority to freeze these tokens in compliance with a temporary restraining order.
Circle controls USDC’s minting and distribution, allowing it to block or blacklist addresses when required by law or policy. This practice has precedent, as Circle blacklisted tokens after the $1.4 billion Bybit hack earlier this year. The current freeze relates to the Libra meme coin legal case. The freeze occurred after a federal court in the Southern District of New York issued a temporary restraining order at the request of Burwick Law, a law firm involved in the litigation.
Max Burwick, representing the firm, confirmed the order and said a preliminary injunction hearing will take place on June 9, 2025. Burwick Law has filed a class-action lawsuit against Kelsier Ventures, Meteora, and executives for their roles in the Libra token scandal. Meanwhile, plaintiff Martin Romeo attributed the freeze request to Argentina’s justice department. Both parties are involved in ongoing litigation concerning the token’s launch and subsequent fallout.
Background: Libra Token Controversy
The Solana-based Libra token, debuted earlier this year, quickly surged to a multi-billion-dollar market cap. Argentine President Javier Milei actively promoted the token on social media, participating in political scrutiny. However, the token’s value collapsed by nearly 90%, sparking accusations of a pump-and-dump scheme as insiders cashed out after the gains leading to a massive dip.
Following the token’s crash, Milei faced criminal charges related to the Libra token promotion. The Argentine government formed a task force to investigate the scandal. Documents show this body was dissolved recently, with the government stating the investigation was complete but offering no further details. On the same day the USDC freeze became public, Circle filed for an initial public offering on the New York Stock Exchange. The firm targets a $6.7 billion valuation.
The freeze highlights the ongoing regulatory and legal challenges stablecoin issuers face amid the growing integration of cryptocurrencies with traditional markets. This situation underscores the influence issuers like Circle hold over token liquidity and the regulatory environment shaping digital asset markets. The frozen USDC linked to Libra remains inaccessible until the court resolves the dispute in June.
