US Court Halts $57M in USDC Due to LIBRA Token Dispute
A federal court in the United States has placed a freeze on roughly $57.65 million worth of USDC stablecoins related to a class action lawsuit concerning the LIBRA crypto token scam that occurred a few months back.
On May 28, 2025, the Southern District of New York’s US District Court issued a Temporary Restraining Order, leading to the freezing of these assets. The funds will continue to be frozen until June 9th, when a hearing is set to occur to decide whether to extend the freeze while the lawsuit is ongoing.
Circle’s multi-signature freeze authority has immobilized two Solana wallets associated with the LIBRA deployer and project team as part of the ongoing legal action initiated by the New York-based law firm Burwick.
In this lawsuit, multiple investors of LIBRA are taking legal action against Kelsier Ventures, a cryptocurrency company, and its co-founders, Gideon, Thomas, and Hayden Davis.
ALERT: $57M OF USDC ASSOCIATED WITH LIBRA FROZEN BY CIRCLE
Circle has just frozen two Libra accounts, including the wallet belonging to the Libra deployer.
These accounts held a total of $57M in USDC which is now inaccessible. pic.twitter.com/HpmaM5HwVJ
— Arkham (@arkham) May 28, 2025
Additional defendants in this case encompass Benjamin Chow, co-founder of Meteora, a Solana-based Decentralized finance platform; Julian Peh of KIP Protocol, a decentralized AI infrastructure focused on digital property rights; and other entities involved in the promotion of the LIBRA crypto token.
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Background on the Lawsuit
The LIBRA memecoin gained attention following a February 14, 2025 post on X by Argentinian President Javier Milei. The coin was promoted as a way to price floor small businesses in Argentina.
Following Milei’s promotion on X, the LIBRA token’s price skyrocketed from mere cents to $5, with its crypto market capitalization reaching $4 billion, only to plummet by 94% shortly thereafter.
It was reported that insiders controlling over 70% of the crypto token supply sold off significant quantities, causing the LIBRA token’s price to crash dramatically.
This led to political uproar in Argentina, prompting opposition members to market demand Milei’s impeachment. Although the movement lacked momentum, a poll from March 2025 by Zuban Córdoba indicated that the scandal negatively impacted Milei’s approval and public perception.
The lawsuit was initiated by Burwick on March 17, 2025, accusing the defendants of launching the LIBRA digital currency, deceiving investors, and misappropriating upwards of $150 million while investors collectively suffered losses exceeding $250 million.
Solscan, a Solana blockchain explorer, revealed data indicating that authorities froze around $44.59 million in stablecoins at the address 3Fwr…ZQpK, while over $13 million was locked from the wallet 3nHw…xNgH.
The freezing of assets demonstrates the US courts’ willingness to step in to minimize further losses and ensure potential repayment for victims. If successful, this case could establish a significant precedent, holding cryptocurrency founders and promoters responsible for misleading investors and inciting speculative bubbles.
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Milei Shuts Down LIBRA Crypto token Investigation
On May 19, 2025, Milei enacted a decree to dissolve the investigation task force looking into the LIBRA scandal. Importantly, no charges have been filed against Milei or any other Argentinian officials involved in the matter.
Itai Hagman, a member of Argentina’s Chamber of Deputies, remarked, “It was always a ruse, they never dared to investigate anything, and they’re covering for each other because they’re completely embroiled in it.”
Up until now, the only rationale provided by the authorities for disbanding the task force is that its designated responsibilities have been completed.
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Key Takeaways
- A U.S. federal court has frozen $57.65M in USDC as part of a class action lawsuit regarding the LIBRA token scam
- The funds will remain frozen until June 9th, awaiting a hearing on whether the freeze continues throughout the lawsuit
- LIBRA investors are taking legal action against Kelsier Ventures, a digital currency firm, and its co-founders, Gideon, Thomas, and Hayden Davis
The post US Court Blocks $57M in USDC Amid LIBRA Token Controversy appeared first on 99Bitcoins.
