Circle, the issuer of the USDC stablecoin, has reportedly frozen two wallets linked to the controversial Solana-based memecoin project known as Libra.
The wallets in question hold a combined total of approximately $57.6 million in USDC, according to on-chain data published by analytics platform Arkham.
One of the frozen accounts reportedly belongs to the deployer of the Libra token, holding around $13 million, while the other wallet contains approximately $44.6 million.
The freeze appears to be part of an escalating legal dispute surrounding the Libra token, which gained public attention earlier this year after its alleged endorsement by Argentine President Javier Milei.
The token saw a rapid surge in market value, peaking at over $2 billion, before suffering a sharp collapse that wiped out most of its gains. Legal proceedings have since been initiated, though there is disagreement over which jurisdiction authorized the wallet freeze.
Conflicting Legal Claims Add Complexity to Case
Confusion remains over which legal entity requested the wallet freeze. Burwick Law, a US-based firm previously involved with memecoins such as HAWK and Pump.fun, claims that the U.S. District Court for the Southern District of New York issued a temporary restraining order.
However, Martin Romeo, a plaintiff in a separate Argentine legal action involving Libra, has stated that the freeze was requested through Argentina’s judicial system. As of now, Circle has not issued a public statement confirming which legal authority prompted the action.
Libra's connection to President Milei has become central to ongoing investigations. The president initially shared a link to the Libra token’s smart contract on social media, framing it as a project aimed at helping Argentine entrepreneurs.
Following the token’s price collapse, Milei denied prior knowledge of the project’s specifics and claimed no intent to promote investment.
Allegations later surfaced suggesting that Milei’s sister may have been compensated by Hayden Davis, CEO of Kelsier Ventures and an alleged Libra advisor, to influence the president's promotion of the project.
Legal scrutiny into the project has intensified, with Argentine authorities recently requesting the unsealing of the bank accounts of both Milei and his sister.
However, just days after that move, the investigative unit overseeing the case was disbanded, raising concerns over the future of the probe. Meanwhile, the frozen USDC remains inaccessible, pending resolution of jurisdictional and legal disputes.
The situation highlights the power held by stablecoin issuers like Circle to intervene in on-chain activity when legal conditions apply.
