The stablecoin USD Coin (USDC) issuer Circle froze two Solana-based wallets connected to the LIBRA memecoin deployer and project team, according to a May 29 report by blockchain intelligence firm Arkham.
Arkham claims that the total value in the two wallets, which have all been rendered immovable, was around $57.65 million in USDC.
Circle Uses Multisig Authority to Freeze Wallets Amid Fraud Concerns
Circle’s multisig freeze authority, which enables the issuer to step in on particular transactions or addresses in the event of fraud, regulatory issues, or illegal conduct, was used to carry out the freeze.
The move indicates increased attention being paid to LIBRA, a contentious memecoin project that has recently come under fire.
Circle’s action highlights the centralized authority that issuers have over stablecoins, even those that run on decentralized networks like Solana.
In today’s changing crypto world, the incident emphasizes the delicate balance between decentralization and oversight, as well as the growing role of centralized bodies in regulating blockchain activity.
Circle Wallet Freeze Linked to March Class-Action Lawsuit in New York
Circle’s wallet freeze is connected to a class-action complaint that was filed in the Southern District of New York in March.
The cryptocurrency startup firm Kelsier Ventures and its co-founders Gideon, Thomas, and Hayden Davis are accused of fraud and wrongdoing by hundreds of LIBRA investors.
The LIBRA initiative, which is currently being investigated by the government and courts, is accused of misleading investors.
The defendants are accused of masterminding a fraudulent scheme that resulted in large financial losses in the complaint, which was filed by the New York-based legal firm Burwick.
The wallets were frozen, which is a significant step in the well-known case and might be an attempt to protect assets while the legal process is ongoing.
LIBRA Token Surged After February Launch Backed by President Milei’s Social Media Push
Following its February 2025 launch, the LIBRA token experienced a sharp increase in value, primarily due to Argentine President Javier Milei’s social media advocacy.
LIBRA, which was promoted as a tool to assist small enterprises in Argentina, attracted public attention right away. The token’s market capitalization surpassed $4 billion when its price skyrocketed from a few cents to over $5 within an hour of its launch.
But the spike didn’t last long. Nearly instantly, insiders who were said to possess 70% of the token’s supply started selling off their holdings. This led to a sharp 90% price collapse.
Retail investors lost an estimated $250 million, while insiders allegedly made over $150 million. Since then, the incident has led to legal action and regulatory inquiries.