Shocking USDC Freeze: $57M Linked to Libra Memecoin Scandal
Big news from the crypto world! A significant development just unfolded in a US court concerning a substantial amount of stablecoin. Specifically, a Manhattan federal court has issued an order leading to a **USDC freeze** of roughly $57 million. This action is directly connected to the highly controversial **Libra memecoin** and an ongoing **crypto lawsuit**.
Understanding the $57M USDC Freeze
So, what exactly happened? On May 28, a temporary restraining order was granted by a federal court in the Southern District of New York (SDNY). This order targeted approximately $57.65 million worth of the **stablecoin** USDC held at Circle.
The freeze was requested as part of a class-action lawsuit. According to Max Burwick, the lawyer representing the class group, this move was a crucial step in securing assets allegedly tied to the controversial memecoin project.
Here are the key details of the freeze:
- **Amount Frozen:** Approximately $57.65 million USD Coin (USDC).
- **Location:** Funds held at Circle, frozen by a Manhattan federal court (SDNY).
- **Date:** May 28, 2024.
- **Reason:** Allegedly linked to the Libra memecoin scandal and a related class-action lawsuit.
The court has scheduled a hearing for June 9 to decide whether the assets will remain frozen as the lawsuit proceeds.
The Libra Memecoin Controversy
At the heart of this legal action is the **Libra memecoin**. This cryptocurrency gained notoriety following a dramatic surge and subsequent crash.
The class-action lawsuit was filed on March 17 against Kelsier Ventures and its three co-founders: Gideon, Thomas, and Hayden Davis. The plaintiffs, including Omar Hurlock, allege that the defendants created the Libra cryptocurrency and misled investors. The suit claims they siphoned over $100 million from liquidity pools through deceptive practices.
The lawsuit also names blockchain companies KIP Protocol and its CEO, Julian Peh, along with Meteora and its co-founder, Benjamin Chow, as defendants.
The **Libra memecoin** saw its market cap briefly hit $4 billion after a notable X post from Argentine President **Javier Milei** on February 14. However, this peak was short-lived, with the price crashing 94% within hours. This event sparked a political scandal in Argentina, leading to calls for Milei’s impeachment, though these efforts didn’t gain significant traction.
Polling data from March suggested the Libra scandal negatively impacted Milei’s public image and the national government’s approval rating.
On-Chain Evidence and the Stablecoin Freeze
The **USDC freeze** was confirmed by on-chain data. Data shared by the class group’s lawyer and verified on Solana’s blockchain explorer, Solscan, shows two Solana wallets were frozen on May 28:
- Wallet Address “3Fwr…ZQpK”: Held approximately $44.59 million USDC.
- Wallet Address “3nHw…xNgH”: Held approximately $13 million USDC.
Both wallets were frozen by the Multisig Freeze Authority, as indicated by Solscan data. This technical detail confirms the direct action taken on the blockchain to secure the assets.
Javier Milei and the Argentine Angle
Adding another layer to this saga is the involvement of Argentine President **Javier Milei**. On May 19, before the US **USDC freeze**, Milei signed a decree to shut down a task force that had been established in Argentina to investigate the Libra scandal domestically.
While no action was taken against Milei or other Argentine officials potentially tied to the scandal in Argentina, critics argued that a genuine investigation never truly occurred, suggesting a cover-up.
What This Crypto Lawsuit Means
This **crypto lawsuit** and the subsequent **USDC freeze** highlight the increasing scrutiny on memecoins and the individuals behind them. It also shows how stablecoins, despite their design for stability, can become entangled in legal disputes involving alleged fraud.
The US court’s action demonstrates that legal authorities are finding ways to freeze assets held on-chain, even those linked to projects with complex international connections and political dimensions like the one involving **Javier Milei**.
Looking Ahead
The June 9 hearing will be crucial in determining the immediate future of the frozen $57 million USDC. Whether the temporary freeze becomes a more prolonged asset hold will depend on the arguments presented and the court’s decision.
This case serves as a stark reminder of the risks involved in memecoin investments and the potential legal repercussions for those accused of misleading investors. It also underscores the growing intersection of traditional legal systems and the decentralized world of crypto assets, including **stablecoin** holdings.
Summary
A US federal court has ordered the **USDC freeze** of $57 million allegedly linked to the controversial **Libra memecoin** scandal. This significant development is part of an ongoing **crypto lawsuit** against Kelsier Ventures and others, accusing them of defrauding investors. The case also has a political dimension due to the involvement of Argentine President **Javier Milei**. The freeze, confirmed by on-chain data of Solana wallets, awaits a crucial court hearing on June 9 to determine its continuation. This event underscores the increasing legal scrutiny on memecoins, stablecoins, and the crypto space as a whole.
