Stablecoin issuer Circle has frozen approximately $58 million worth of USDC held in two wallets linked to the controversial LIBRA memecoin project. The freeze, executed on the Solana blockchain, targets wallet addresses associated with the token’s deployer and early project insiders.
The two wallets—now marked as frozen on Solana block explorer Solscan—hold roughly $44.6 million and $13 million in USDC, respectively. The freeze prevents the movement or redemption of the stablecoins, effectively locking the funds indefinitely unless reversed by court order.
Circle, which retains control over the minting and burning of USDC, has the authority to blacklist addresses involved in fraud, hacks, or legal disputes. That authority has been exercised in other high-profile incidents, including the February Bybit hack, where over $1.4 billion in assets were compromised.
This latest action comes amid mounting legal pressure on LIBRA insiders following the filing of a class-action lawsuit in the United States. Investors claim they were misled into buying the token through a pump-and-dump scheme that gained traction after Argentine President Javier Milei publicly shared promotional material about LIBRA on social media earlier this year.
Court Order Targets Hayden Davis and Kelsier Ventures
According to Burwick Law, the New York-based firm representing aggrieved investors, a U.S. federal court granted a temporary restraining order on May 27, leading to the asset freeze. The court order targets wallets controlled by Hayden Davis and entities including Kelsier Ventures and Meteora.
Litigation counsel Tim Treanor assisted in securing the freeze, which was executed with cooperation from Circle. A preliminary injunction hearing is scheduled for June 9, where the court will decide whether the freeze will remain in effect as the case progresses.
In parallel, a related legal investigation is unfolding in Argentina. Plaintiffs there argue that LIBRA was launched under fraudulent pretenses and misleading marketing tactics, culminating in retail losses after the token’s dramatic crash. One plaintiff, Martin Romeo, claimed Argentina’s Justice Department had also pressured Circle to freeze the wallets, though U.S. filings cite the Southern District of New York (SDNY) order as the official legal basis for the action.
Burwick’s lawsuit seeks restitution and punitive damages, alleging that project insiders promoted the token with false promises while covertly preparing to offload large holdings. The legal complaint names Kelsier Ventures and its affiliates as key orchestrators of the scheme.
From Viral Surge to Legal Fallout: The LIBRA Token Collapse
The LIBRA token was launched in February and quickly went viral after Argentine President Javier Milei posted promotional content endorsing the project. Fueled by political hype and speculative fervor, the Solana-based memecoin surged to a multi-billion-dollar market cap within days.
However, the rally proved short-lived. Within weeks, LIBRA’s value plunged by over 90%, and on-chain data revealed that wallets tied to the project’s early operations dumped massive quantities of the token during the price peak—suggesting deliberate insider profiteering.
President Milei soon found himself entangled in the backlash. He faced formal fraud allegations and came under investigation by a government task force assembled to probe the LIBRA affair. However, that task force was abruptly dissolved last week, raising concerns about potential political interference or lack of accountability at the highest levels.
Meanwhile, Circle appears undeterred by the legal and political turbulence surrounding its stablecoin. On Tuesday, the firm filed to go public on the New York Stock Exchange, targeting a valuation of $6.7 billion. The move comes as Circle’s ability to freeze USDC has become a pivotal element in ongoing legal actions in both the United States and Argentina.
Quick Facts
- Circle froze $58 million in USDC linked to LIBRA’s deployer and insiders
- U.S. court issued a temporary restraining order on May 27; hearing set for June 9
- Lawsuit names Hayden Davis, Kelsier Ventures, and Meteora as defendants
- LIBRA token crashed 90% after viral hype tied to Argentine President Javier Milei
- Circle plans NYSE public listing amid ongoing legal scrutiny
