US court froze $57 million in USDC allegedly linked to the LIBRA scandal
A federal court in the United States has frozen around $57.65 million in the USDC stablecoin in a class action lawsuit related to the controversial memecoin Libra.
On-chain data shared with Cointelegraph by the class group's attorney, Max Burwick, shows that nearly $57 million in USDC was frozen on May 28 after a Manhattan court agreed to a temporary freeze.
"Yesterday, a federal court in SDNY [Southern District of New York] issued a Temporary Restraining Order at our request, Burwick Law, supported by Tim Treanor, freezing approximately $57.65 million in USDC held at Circle," Burwick told Cointelegraph.
He added that the court is scheduled to hold a hearing on June 9 to determine whether the assets will remain frozen as the class action proceeds.
Burwick represents Omar Hurlock and other plaintiffs in a class action lawsuit against the cryptocurrency venture capital firm Kelsier Ventures and its three co-founder brothers, Gideon, Thomas, and Hayden Davis, on March 17, alleging that they created the cryptocurrency Libra (LIBRA) and deceived investors to extract over $100 million from unilateral liquidity pools.
The lawsuit also named blockchain infrastructure companies, KIP Protocol and its CEO, Julian Peh, along with Meteora and its co-founder, Benjamin Chow, as defendants.
Chow's attorneys, Kelsier Ventures, and KIP Protocol were contacted for comments.
LIBRA reached a market capitalization of $4 billion following a post on X by Argentine President Javier Milei on February 14 before plummeting 94% hours later.
The saga caused a political scandal for Milei, leading members of Argentina's opposition party to call for his removal, although little traction was gained beyond those statements.
Data from the Zuban Córdoba polling platform in March suggested that the Libra scandal negatively impacted Milei's image and the approval rating of the national administration.
Two Solana wallets with total balances of USD worth $57.65 million were frozen on May 28 at 3:15 and 3:18 AM UTC.
Data from the Solana blockchain explorer, Solscan, shows that the address "3Fwr…ZQpK" had $44.59 million in the frozen stablecoin, while just over $13 million was frozen from the wallet address "3nHw…xNgH."
Both wallets were frozen by the Multisig Freezing Authority, according to Solscan data.
Milei closes the Libra investigation in Argentina
On May 19, Milei signed a decree to close a task force established to investigate the Libra scandal.
No actions were taken against Milei or any other Argentine official allegedly linked to the scandal.
However, some critics say that a legitimate investigation was not conducted properly in the first place.
"It was always a farce, they never dared to investigate anything at all, and they are covering for each other because they are completely involved in it," said Itai Hagman, an economist and member of the Argentine Chamber, in a post on X on May 20.
