Circle Freezes $57M of LIBRA's USDC

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$57M worth in USDC has been frozen by Circle across two Solana addresses tied to the LIBRA memecoin launch in February this year. The two addresses, 3Fwr8 and 3nHwg, hold 44.59M and 13.06M USDC respectively as a portion of the proceeds from the LIBRA token launch. The freeze was made in compliance with a US Federal court order at the request of Burwick Law, which is representing the plaintiffs in the case.

This action highlights the centralized control inherent in stablecoins like USDC. Unlike fully decentralized assets, Circle, as the issuer, retains the ability to blacklist addresses and prevent funds from being moved. This capability is often used to comply with legal requirements, such as the court order obtained in this particular case involving the LIBRA proceeds.

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The LIBRA token was a memecoin launched by Kelsier Ventures, allegedly backed by the Argentine President, Javier Milei. Not long after its launch, the token crashed more than 90%, resulting in backlash from the public, with Argentina’s opposition party calling for his impeachment. So far, no legal action has been taken against Milei with regard to the LIBRA token.

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The situation surrounding the LIBRA token serves as a stark reminder of the volatility and high-risk nature of the memecoin market. The alleged connection to a high-profile political figure like President Milei likely amplified both the initial interest and the subsequent public outrage following the token's collapse, leading to significant political and legal repercussions.