Circle Freezes $58 Million in USDC Linked to Libra Scandal

Circle, the issuer of the USDC stablecoin, has frozen approximately $58 million worth of USDC in two Solana wallets linked to the Libra meme coin scandal. The accounts, which held $44.59 million and $13.06 million in USDC respectively, are now immovable, meaning the funds cannot be sold or transferred. This action comes as a result of Circle's ability to control the minting and issuance of USDC, allowing it to freeze or blacklist tokens according to its policy.

The Libra token, which was promoted by Argentine President Javier Milei, caused significant controversy earlier this year. The token's launch led to a political scandal and a dramatic fluctuation in its market value, with accusations of a pump-and-dump scheme surfacing as wallets connected to the token cashed out profits. The scandal resulted in President Milei being charged with fraud and the establishment of a government task force to investigate the matter, although the task force was later disbanded.

The freeze on the USDC accounts was reportedly requested by multiple parties, including the crypto-focused law firm Burwick Law and Martin Romeo, a plaintiff in the Argentinian case. Burwick Law stated that the freeze was due to a temporary restraining order issued at their request, supported by Tim Treanor. The law firm previously filed a class-action suit against Kelsier Ventures and Meteora, along with some named executives, for their roles in the Libra token scandal.

Burwick Law has indicated that they will return to court on June 9, 2025, for a preliminary injunction hearing to keep the assets frozen through the rest of the litigation. The freeze on the USDC accounts highlights the ongoing legal and regulatory challenges surrounding the Libra token scandal and the broader cryptocurrency market.

Circle's decision to freeze the USDC accounts underscores the company's commitment to compliance and its ability to take swift action in response to legal and regulatory concerns. The freeze also serves as a reminder of the potential risks associated with investing in cryptocurrencies and the importance of conducting thorough due diligence before making investment decisions.