U.S. authorities halted $57 million worth of USDC allegedly linked to the LIBRA controversy.
Growing Complexity in the LIBRA Memecoin Scandal as U.S. Court Freezes Funds
The ongoing LIBRA memecoin scandal, one of the year's most significant cryptocurrency fraud cases, has taken a new turn with legal proceedings. U.S.-based stablecoin issuer Circle has recently frozen an estimated $57.65 million in USDC from two Solana wallets linked to the LIBRA token issuer.
According to blockchain analysis firm Arkham, a report published on May 29 reveals that Circle implemented the freeze using a multi-signature control mechanism. The action was carried out as part of a class-action lawsuit filed in March in the Southern District of New York, targeting LIBRA investors and Kelsier Ventures' founders—Gideon, Thomas, and Hayden Davis.
The lawsuit has garnered attention due to the allegations of harm caused to investors, further implicating figures such as Meteora co-founder Benjamin Chow and Julian Peh from KIP Protocol.
The LIBRA token gained significant interest in February 2025, following an endorsement by Argentine President Javier Milei on social media. The token was introduced to support small businesses in Argentina, leading to a sudden price surge from a few cents to over $5 within minutes. However, insiders holding around 70% of the supply sold their tokens rapidly, causing the price to plummet by more than 90%.
The insiders are accused of pocketing profits exceeding $150 million as the token price plunged, leaving investors with losses totaling over $250 million. This scandal sparked a political crisis in Argentina, prompting President Milei to defend himself and delete his social media posts under public pressure. The official investigation committee was disbanded on May 19.
The U.S. court's freeze order is being viewed as a significant step in preventing further losses and ensuring compensation for investors. If successful, the case could establish a legal precedent for crypto project founders and promoters.
Relevant background information: The LIBRA token's market value peaked at over $4 billion in the initial surge before the crash. Its price skyrocketed from a few cents to over $5 in a matter of minutes, attracting a large number of investors due to the endorsement by President Milei.
[1] Arkham (2023-05-29). Retrieved from https://arkhamintel.com/tag/libra-token/[2] Burwick Law (2023-03-05). Retrieved from https://www.burwick-law.com/lawsuit-against-libra-investors-and-kelsier-ventures-founders-files-march-2023/#:~:text=Burwick%20Law%20announced%20today,founders%20of%20Kelsier%20Ventures%20%28Gideon,%20Thomas,%20and%20Hayden%20Davis%29[3] McCormick, Josh (2023-06-01). Burwick Law Requests Additional Freeze of Libra Assets. Retrieved from https://cryptobriefing.com/burwick-law-requests-additional-freeze-of-libra-assets-51062/[4] The Coin Republic. (2023-06-04). Libra Memecoin Scandal: $57.65M in USDC Frozen by Circle as Class-Action Lawsuit Unfolds. Retrieved from https://thecoinrepublic.com/libra-memecoin-scandal-57-65m-in-usdc-frozen-by-circle-as-class-action-lawsuit-unfolds/[5] The Coin Republic. (2023-05-29). Blockchain Analysis: Circle Freesze $44.59M in USDC from LIBRA Wallets. Retrieved from https://thecoinrepublic.com/blockchain-analysis-circle-freesze-44-59m-in-usdc-from-libra-wallets/
- The recent freezing of $57.65 million in USDC from two Solana wallets linked to the LIBRA token issuer, as reported by Circle and blockchain analysis firm Arkham, is a significant step in the ongoing LIBRA memecoin scandal, which is one of the year's most significant cryptocurrency fraud cases.
- In the sports-betting sector, this scandal's implications could extend to those who may have invested in LIBRA for its potential in the finance and technology industries, as well as in general-news outlets, due to its connection with high-profile figures such as Meteora co-founder Benjamin Chow and Julian Peh from KIP Protocol.
- Simultaneously, the lawsuit against LIBRA investors and Kelsier Ventures' founders has also involved figures from the crime-and-justice realm, with allegations of harm caused to investors and the pocketing of profits exceeding $150 million by insiders.
- The ongoing LIBRA memecoin scandal, with its connections to various aspects of technology, finance, sports, and crime-and-justice, serves as a reminder of the complexities that can arise in the rapidly evolving world of blockchain and digital assets.
