A US federal court has ordered the freezing of approximately $57.65 million in USDC linked to the embattled LIBRA meme coin. The latest development is a significant move in an ongoing class-action lawsuit targeting alleged fraud.
The freeze, executed on May 28 via a Temporary Restraining Order (TRO) issued by the Southern District of New York, affects two Solana-based wallets tied to Kelsier Ventures – the firm behind LIBRA’s controversial launch. The legal action was initiated by Burwick Law, representing investors who claim they were misled by LIBRA’s promoters.
The lawsuit, filed on March 17, names Kelsier’s co-founders Gideon, Thomas, and Hayden Davis, as well as Julian Peh of KIP Protocol and Benjamin Chow of Meteora. Plaintiffs allege the team orchestrated a deceptive scheme that lured retail investors into one-sided liquidity pools, only to drain over $100 million in value through coordinated token dumps.
LIBRA briefly surged to a $4 billion market cap in February, following a public endorsement by Argentine President Javier Milei. The rally, however, was short-lived. Within hours, the token plummeted over 90%, triggering investor panic and political fallout in Argentina. Milei later deleted his social media posts and on May 19, dissolved the national task force that had been set up to probe the incident.
According to on-chain data, the two wallets, containing over $44 million and $13 million, respectively, were frozen through Circle’s infrastructure following the court’s order. A hearing on June 9 will determine whether the freeze remains in place as the case unfolds.
The ruling could set an important precedent for asset protection in crypto-related lawsuits and signal stricter oversight for hype-driven token launches going forward.