Circle Freezes $57 Million in USDC Connected to Javier Milei Libra Token Controversy

In a significant development in the ongoing Libra memecoin saga, Circle, a leading stablecoin issuer, has frozen approximately $57.65 million in USDC held in wallets linked to the controversial token. The freeze, executed on Tuesday, targets two Solana based wallets associated with the Libra token team and its deployer, locking funds that can no longer be transferred or sold. This action follows a tumultuous year for the Libra token, which gained notoriety for its ties to Argentine President Javier Milei and sparked widespread debate in cryptocurrency and political spheres.

The frozen wallets, as reported on the Solana blockchain explorer Solscan, contain $44.59 million and $13.06 million in USDC, a stablecoin pegged to the U.S. dollar. Circle’s ability to freeze these assets stems from its control over USDC’s minting and issuance, which allows the company to blacklist addresses in line with its policies. Such measures are not uncommon among major stablecoin issuers like Circle and Tether, who have previously frozen accounts linked to exploits or legal disputes. In this case, the freeze was prompted by a temporary restraining order requested by Burwick Law, a crypto focused legal firm, and supported by Argentina’s justice department, according to plaintiff Martin Romeo in the Argentine case surrounding the Libra token.

Legal Actions and Market Fallout

The Libra token, launched on the Solana blockchain in February with public endorsement from President Milei on X, initially surged to a multi-billion-dollar market cap. However, its value plummeted nearly 90% soon after, fueling allegations of a pump-and-dump scheme. Wallets connected to the token were observed cashing out significant profits, prompting accusations of fraud. These events led to a class-action lawsuit filed by Burwick Law against Kelsier Ventures, Meteora, and several executives involved in the token’s rollout. The legal battle escalated when President Milei faced fraud charges, although a government task force established to investigate the matter was recently disbanded.

The controversy surrounding Libra has broader implications for the crypto market, highlighting the risks associated with high-profile endorsements and volatile memecoins. Circle’s decision to freeze the wallets underscores the growing intersection of regulatory oversight and decentralized finance. Coinciding with this action, Circle announced its filing for an initial public offering on the New York Stock Exchange, targeting a $6.7 billion valuation.