Circle, the issuer of the popular stablecoin USD Coin (USDC), has frozen nearly $58 million in digital assets linked to the ongoing LIBRA memecoin scandal.
This decisive move marks a significant development in one of 2025’s most high-profile crypto controversies as legal and political consequences continue to unfold.
Blockchain analytics firm Arkham has reported that Circle used its multisig authority to freeze two Solana (SOL) wallets associated with the LIBRA token deployer and project team. The wallets, now immobilized, contained $57.65 million in USDC. This action is directly tied to a class-action lawsuit filed in March in the Southern District of New York, where hundreds of investors are seeking damages.
ALERT: $57M OF USDC ASSOCIATED WITH LIBRA FROZEN BY CIRCLE
Two Libra accounts have just been frozen by Circle, including the Libra deployer wallet.
These accounts contained a combined $57M in USDC which is now immobile. pic.twitter.com/HpmaM5HwVJ
— Arkham (@arkham) May 28, 2025
The LIBRA token launched in February 2025, quickly gaining traction after Argentine President Javier Milei promoted it on social media. Marketed as a tool to support small businesses in Argentina, the token’s price skyrocketed from a few cents to over $5 in less than an hour, pushing its market capitalization above $4 billion.
However, the rapid rise was followed by a dramatic collapse. According to the lawsuit, insiders—allegedly controlling 70% of the token’s supply—dumped large amounts within hours, causing the price to crash by over 90%. Insiders are believed to have profited by more than $150 million, while retail investors suffered losses exceeding $250 million.
The scandal has triggered political turmoil in Argentina, with calls for President Milei’s impeachment after he deleted promotional posts and denied involvement. Although a government task force was formed to investigate, Milei disbanded it on May 19.
Circle’s asset freeze highlights the growing willingness of U.S. courts and regulators to act swiftly in protecting investors and securing potential restitution. The outcome of this lawsuit could set a precedent for holding crypto founders and promoters accountable for misleading the public and capitalizing on hype-driven markets.
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