Circle – the issuer of USDC – froze nearly $58 million in $USDC connected to the LIBRA memecoin scam, reportedly as part of an ongoing lawsuit spearheaded by the controversial law firm, Burwick Law.
The lawsuit names not only Hayden Davis and Kelsier Ventures, but also the Solana-based decentralized exchange, Meteora, its Co-Founder, Ben Chow, Kip Protocol, and other members of the Davis family.
“Burwick Law’s international class action over the $LIBRA token on Solana is progressing in the Southern District of New York. We represent hundreds of Libra holders pursuing recovery from Ben Chow, Meteora, Julian Peh, Kip Protocol, Hayden Davis, CT Davis, Gideon Davis, and Kelsier after the token’s price collapsed more than 90 percent,” the firm posted on X.
The post came less than 12 hours after Circle froze $USDC accounts directly tied to the LIBRA token deployment.
The exact circumstances around Circle’s freeze remain unclear, as the company has yet to make a public statement on the matter.
A man named Martin Romeo claimed that the freeze request came through the Argentinian judicial system. However, Burwick Law denies this, stating that the U.S. District Court for the Southern District of New York “granted Burwick Law’s emergency TRO, supported by co-counsel Tim Treanor, freezing ≈ $57.65 million USDC held at Circle.”
Regardless of how the freeze came about, the $58 million is now under Circle’s control – potentially offering a path to restitution for plaintiffs involved in the case against Kelsier Ventures.
Circle has faced criticism in the past for failing to freeze stolen or maliciously obtained funds quickly enough – especially following the $1.5 billion Bybit hack in February 2025.
Onchain investigator ZachXBT publicly called out Circle CEO, Jeremy Allaire, on X, saying:
“How about you tell the entire community why Circle has yet to freeze 115K USDC directly tied to the Bybit hack by DPRK with zero obfuscation after 5 hours? Meanwhile, Tether already froze 106K USDT multiple hours ago.
How many more examples will people have to show until the space understands Circle is a bad actor?”
Tether, by contrast, has a history of freezing assets when requested by law enforcement. One of its most high-profile actions came in November 2022, when it froze nearly $47 million worth of USDT on TRON linked to FTX.
The largest ever freeze of USDT happened in November 2023 when Tether collaborated with the OKX crypto exchange and the United States Department of Justice (DOJ) in an investigation linked to a global pig butchering romance scam.
MILESTONE | #Tether Voluntarily Freezes $225 Million in Stolen $USDT – The Largest Ever Freeze of USDT in History
The frozen wallets are on the secondary market and are not associated with Tether’s customers.https://t.co/Z3awsCVRZ2 @Tether_to $USDT @paoloardoino pic.twitter.com/K5qmtK0dui
— BitKE (@BitcoinKE) November 28, 2023
Though fund freezes in the middle of legal battles aren’t unprecedented, this latest move has sparked fresh debate.
A trader known as Newsy Johnson posted on X:
“Insane precedent here. I hate Hayden/Libra as much as anything else, BUT
He’s currently not on warrant for arrest
He never exploited or hacked anyone
Everyone willingly bought the token.
So Circle freezes $50 million. Where does that money go? Do they keep it? Do victims get a refund? How are they justifying freezing the assets?”
The recent freezing of nearly $58 million in USDC linked to the LIBRA memecoin scam appears to be the first publicly known instance where Circle has frozen assets specifically associated with a memecoin.
Previously, Circle has frozen $USDC in response to legal or regulatory actions, such as:
In July 2020, Circle froze $100,000 in USDC following a law enforcement request.
In August 2022, Circle froze over 75,000 USDC linked to addresses associated with Tornado Cash, complying with U.S. Treasury sanctions.
In July 2023, Circle froze approximately $63 million in USDC following a security breach involving the Multichain cross-chain bridge platform.
However, there is no public record of Circle freezing USDC assets tied to a memecoin prior to the LIBRA case.
This action may set a precedent for how Circle handles similar situations involving memecoins in the future.
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