- $57.65 million in USDC frozen by Circle after a U.S. court order tied to LIBRA’s alleged pump-and-dump.
- LIBRA’s collapse triggered political uproar in Argentina, and the legal case may set new precedents for crypto accountability.
A U.S. federal court has frozen nearly $57.65 million in USDC connected to the now-infamous LIBRA memecoin scandal, a case that’s rapidly evolving into one of 2025’s most explosive legal sagas in crypto.
On-chain data by Arkham Intelligence shows that two Solana wallets—one holding $44.59 million, the other over $13 million—were frozen on May 28 by Circle’s multisig authority, following a court order out of the Southern District of New York (SDNY).
The freeze comes as part of a class-action lawsuit filed in March by Burwick Law on behalf of LIBRA investors. Plaintiffs allege that Kelsier Ventures and its founders—Gideon, Thomas, and Hayden Davis—created the LIBRA token as a pump-and-dump scheme, misleading thousands and walking away with more than $150 million. Investors, on the other hand, are said to have lost upwards of $250 million.
Additional defendants include Julian Peh of KIP Protocol and Benjamin Chow of Meteora, both accused of helping promote and distribute the token.
Milei’s Influence, Then Silence
The scandal exploded into the mainstream after Argentine President Javier Milei posted about LIBRA on X (formerly Twitter) in February 2025. Within an hour, the token skyrocketed from pennies to over $5, pushing its market cap to $4 billion. But just as quickly, it all collapsed—dropping 94% in hours as insiders allegedly dumped 70% of the supply.
Milei deleted his promotional posts shortly after the crash and denied any involvement. While a task force was formed to investigate, it was shut down by a presidential decree on May 19, sparking outrage. Itai Hagman, an Argentine congressman, called the investigation a “complete sham,” accusing officials of covering for one another.
Centralization Concerns After Circle’s Freeze
Beyond the legal drama, the incident has reignited debate around the centralization of stablecoins. Circle’s ability to unilaterally freeze USDC wallets has raised eyebrows across the crypto space. While such tools are often necessary for regulatory compliance and fraud prevention, critics argue they conflict with crypto’s decentralized roots.
Commentators like Newsy Johnson have questioned the legality and ethics of freezing accounts without criminal charges. “Nobody’s been accused of hacking or theft,” he wrote. “People bought a risky token voluntarily. So who decides when funds get locked—and who gets them back?”
As the case heads toward a June 9 hearing to decide if the freeze will remain in place, the crypto world will be watching closely. If the plaintiffs succeed, it could set a powerful precedent for holding token creators accountable when hype turns into harm.
Circle plans $624M IPO, valuing the USDC issuer near $6.7 billion
Circle , the issuer of the USDC stablecoin, is advancing with its plans to go public, aiming to raise up to $624 million through an initial public offering (IPO).
The company intends to offer 24 million shares priced between $24 and $26 each, with 9.6 million shares coming directly from Circle and the remaining 14.4 million from existing shareholders, including Accel and General Catalyst.
This move could value Circle at approximately $6.7 billion on a fully diluted basis. The shares are set to trade on the New York Stock Exchange under the ticker symbol “CRCL”.
This IPO marks Circle’s second attempt to enter the public market, following a previously terminated $9 billion SPAC deal in 2022. In preparation for the IPO, Circle has relocated its global headquarters to New York City, establishing its presence on one of the top floors of 1 World Trade Center
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