US Court Freezes $57M USDC Amid LIBRA Controversy
- Temporary freeze on $57M USDC amid LIBRA token lawsuit.
- Tensions rise over stablecoin issuers’ power.
- Circle’s largest intervention to date, court hearing upcoming.
The U.S. District Court for the Southern District of New York has frozen $57 million in USDC linked to the LIBRA token on May 28, 2025.
The freeze highlights the growing scrutiny on memecoins and the power of stablecoin issuers in regulation.
U.S. Court Freezes $57M USDC in LIBRA Case
The U.S. court ordered a freeze on $57 million in USDC across two Solana wallets. This action stems from a class action lawsuit against the LIBRA token and its creators. Gideon Davis, Co-Founder, Kelsier Ventures, said, “We are fully committed to addressing the legal challenges ahead and providing clarity on our involvement with the LIBRA token.”
Kelsier Ventures and founders are named defendants, with additional figures from Meteora and KIP Protocol. Their involvement in the LIBRA token development is under legal scrutiny.
Asset Freeze Sparks Stablecoin Debate
The freeze has immobilized $57 million, affecting liquidity for LIBRA-related parties. Market observers are keenly watching for potential liquidity shifts across the crypto sector.
Discussion has intensified within the crypto community about the authority of stablecoin issuers to freeze assets and the implications of such actions for blockchain autonomy.
Circle’s Largest USDC Freeze to Date
Circle had previously frozen $75,000 in USDC linked to sanctioned addresses, but this incident marks a new threshold with the largest asset freeze by a stablecoin issuer.
Analysts suggest potential effects on the DeFi ecosystem as asset freezes could lead to reduced Total Value Locked and liquidity pool disruptions, impacting market stability.
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