- A U.S. federal court has frozen approximately $57.65 million in USDC linked to the $LIBRA memecoin scandal
- The freeze targets two Solana wallets associated with the $LIBRA project, following a class-action lawsuit alleging a pump-and-dump scheme
- The $LIBRA token, briefly promoted by Argentine President Javier Milei, surged to a $4 billion market cap before collapsing by 94%
In a significant move, a U.S. federal court has frozen around $57.65 million in USDC tied to the controversial $LIBRA memecoin. The action targets two Solana wallets linked to the $LIBRA project, following allegations of a pump-and-dump scheme that led to substantial investor losses. The $LIBRA token had briefly achieved a $4 billion market cap, fueled by a social media post from Argentine President Javier Milei, before its value plummeted.
Class Action Lawsuit Leads to Freeze
On May 28, 2025, the U.S. District Court for the Southern District of New York issued a temporary restraining order to freeze approximately $57.65 million in USDC held in two Solana wallets associated with the $LIBRA project. The court action was initiated in response to a class-action lawsuit filed in March by Burwick Law on behalf of $LIBRA investors.
The lawsuit alleges that Kelsier Ventures and its co-foundersGideon, Thomas, and Hayden Davisengineered the $LIBRA token as a pump-and-dump scheme, misleading investors and extracting over $100 million through manipulated liquidity pools on Solana.
Circle, the issuer of USDC, executed the freeze through its multisig authority, targeting two Solana wallets: one holding approximately $44.59 million and the other over $13 million. The freeze is one of the largest Circle has implemented to date, reflecting the severity of the allegations and the scale of investor losses.
Political Implications in Argentina
The $LIBRA token gained notoriety after Argentine President Javier Milei promoted it on social media on February 14, 2025, describing it as a project to support Argentine entrepreneurs. The endorsement led to a rapid surge in the tokens value, reaching a market cap of $4 billion, before collapsing by 94% within hours.
The incident sparked political controversy in Argentina, with opposition parties calling for Mileis impeachment and accusing him of participating in a scam. Milei has denied any wrongdoing, stating that he had no relationship with the company behind $LIBRA and received no benefit from the promotion.
Hearing to Determine Next Steps
In response to the scandal, Milei ordered the Anti-Corruption Bureau to investigate whether any member of the national government, including himself, had engaged in misconduct. However, on May 19, 2025, the president signed a decree to shut down the special task force established to investigate the $LIBRA affair, leading to criticism that no meaningful investigation took place.
A hearing is scheduled for June 9, 2025, in the Southern District of New York to determine whether the frozen $57.65 million in USDC will remain locked as litigation continues. Plaintiffs argue that the assets represent ill-gotten gains from a manipulated liquidity trap, while defendants are expected to contest both the restraining order and the fraud allegations.
