In a major twist to the LIBRA memecoin scandal, Circle has frozen nearly $58 million in USDC. The freeze affects two Solana wallets linked to the LIBRA deployer and project team, according to blockchain analytics firm Arkham.
The wallets held $57.65 million in USDC, now locked by Circle’s multisig freeze authority. The move follows a class-action lawsuit filed in March in the Southern District of New York.
Hundreds of LIBRA investors are suing Kelsier Ventures and its co-founders—Gideon, Thomas, and Hayden Davis—along with other alleged promoters like Benjamin Chow of Meteora and Julian Peh of KIP Protocol. The lawsuit claims they tricked investors and operated a pump-and-dump scheme.
After being launched in February 2025, LIBRA became popular quickly due to social media posts by Argentine President Javier Milei. Prices of the token rose from a few cents to more than $5 within an hour, giving it a market cap of $4 billion. However, the excitement didn’t continue.
The price fell by over 90% when 70% of the supply’s managers sold their tokens. Reports suggest that insiders made $150 million, while investors suffered losses exceeding $250 million.
The scandal triggered political outrage in Argentina. Milei deleted his posts and denied involvement, later disbanding a task force investigating the issue.
Circle’s decision to freeze USDC indicates that laws are catching up and investors are receiving priority. If the case succeeds, it could establish a strong rule for punishing crypto founders who mislead the public.
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