A Manhattan federal court froze $57.65 million in USDC on May 28, citing alleged ties to the LIBRA memecoin scandal.
The freeze followed a Temporary Restraining Order issued by the Southern District of New York in response to a class-action lawsuit.
The legal team representing the plaintiffs confirmed the action. Lawyer Max Burwick stated,
“Yesterday, a federal court in SDNY entered a Temporary Restraining Order at our request, Burwick Law, supported by Tim Treanor, freezing approximately 57.65 million USDC held at Circle.”
The order affects two Solana wallets identified through onchain data. Wallet 3Fwr…ZQpK held around $44.59 million, while wallet 3nHw…xNgH contained more than $13 million.
The freeze was executed by Solana’s Multisig Freeze Authority, as confirmed by Solscan.
A hearing is scheduled for June 9, where the court will decide whether to extend the freeze during the class-action lawsuit proceedings.
Kelsier Ventures and Co-Founders Named in LIBRA Scandal Lawsuit
The class-action lawsuit, filed on March 17, alleges that Kelsier Ventures and its co-founders — Gideon Davis, Thomas Davis, and Hayden Davis — created the LIBRA memecoin to mislead investors.
The complaint claims that over $100 million was taken from liquidity pools through manipulative practices.
Additional defendants include KIP Protocol and its CEO Julian Peh, as well as Meteora and its co-founder Benjamin Chow.
These parties are accused of contributing to the LIBRA token scheme on the Solana blockchain.
The lawsuit was filed by Omar Hurlock and a group of other plaintiffs. All named entities and individuals have been contacted for comment. As of now, none have issued a public response.
The LIBRA memecoin was heavily promoted before crashing. Its price collapse raised legal questions about the token’s marketing and underlying operations.
LIBRA Memecoin Hit $4B Before Dropping 94% in Hours
The LIBRA memecoin gained sudden attention on February 14 after a post from Argentine President Javier Milei on X․
Following that post, the token’s market capitalization surged to $4 billion. Within hours, it dropped 94%.
This led to political backlash in Argentina. Several opposition members accused President Milei of supporting a fraudulent project and called for impeachment, though no formal action followed.
A poll by Zuban Córdoba in March showed the LIBRA scandal reduced Milei’s public support.
Despite public criticism, no charges have been filed against Milei or other Argentine officials. On May 19, Milei signed a decree that shut down the task force responsible for investigating the LIBRA memecoin.
In a May 20 post on X, Argentine lawmaker Itai Hagman wrote,
“It was always a fake, they never dared to investigate anything at all, and they’re covering each other up because they’re completely up to their necks in it.”
Blockchain Data Confirms Time and Location of USDC Freeze
Data from Solana’s Solscan explorer confirmed the freeze happened at 3:15 a.m. and 3:18 a.m. UTC on May 28. Both wallets were frozen under the authority of Solana’s onchain protocol tools.
The total $57.65 million USDC frozen remains held under court order as the legal process continues. The issuing company, Circle, has not commented on the court’s action.
This case has drawn significant attention due to the size of the frozen funds, the involvement of the LIBRA memecoin, and links to Javier Milei.
The next steps depend on the outcome of the upcoming June 9 hearing in Manhattan federal court.
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