Circle, a prominent stablecoin issuer, has taken action to freeze two wallet accounts associated with the controversial Libra memecoin scandal, which holds approximately $57.6 million in USDC. Reports from Arkham indicate that one of the frozen wallets contains around $44.59 million, while the deployer wallet for Libra has about $13 million in USDC.
Stablecoin issuers like Circle and Tether have the authority to restrict token transfers in critical situations, such as during legal investigations or significant security breaches. However, the specifics surrounding who requested the freezing of these tokens remain unclear, leading to disputes online.
Burwick Law, a firm involved with the HAWK memecoin and Pump.fun, claims that a temporary restraining order from the U.S. District Court for the Southern District of New York led to the freezing of the wallets. In contrast, Martin Romeo, a plaintiff in the Argentine Libra token case, asserts that he and other plaintiffs sought the order through local judicial channels.
The Libra memecoin, which is based on the Solana blockchain, gained significant attention due to its association with Argentinian President Javier Milei. His endorsement of Libra as a means to support small businesses and startups in Argentina contributed to its rapid rise, with the market cap soaring to over $2 billion. However, this surge was short-lived, as the token’s value plummeted by more than 90% shortly after.
Following the collapse, Milei distanced himself from the project, claiming he had no prior knowledge of it and did not intend to encourage investments. Hayden Davis, CEO of Kelsier Ventures and an alleged advisor to Libra, reportedly paid Milei’s sister to influence the president’s endorsement of the token.
In the aftermath of the memecoin’s decline, Milei has faced fraud allegations from local lawyers regarding his involvement. He has consistently denied any wrongdoing.
