A U.S. court has ordered the freezing of around $57 million in USD Coin (USDC) following its connection to the LIBRA memecoin controversy. Acting on the court’s directive, stablecoin issuer Circle swiftly locked two Solana-based wallets tied to the LIBRA token’s team, effectively stopping any further transfers.
Political Hype Turns to Public Backlash
LIBRA, a meme-inspired cryptocurrency launched earlier this year, gained massive traction after Argentine President Javier Milei endorsed it. His support caused a rapid surge in the token’s value. However, the coin’s popularity was short-lived. LIBRA soon collapsed, prompting accusations of fraud and political manipulation.
Blockchain analytics firms, including Chainalysis and Nansen, revealed that wallets linked to LIBRA’s creators withdrew roughly $99 million from the project’s liquidity pools. These findings raised serious questions about insider activity and the true intent behind the token’s launch.
Accusations of a Pump-and-Dump Scheme
Hayden Davis, CEO of Kelsier Ventures, emerged as a key figure in the scandal. He acknowledged holding the withdrawn funds and claimed he planned to reinvest them into the LIBRA project. Still, critics argue that the token was structured to benefit insiders, fitting the pattern of a classic pump-and-dump scheme.
The fallout extended into Argentina’s political sphere. President Milei’s backing of LIBRA—and its subsequent collapse—sparked demands for impeachment and intensified scrutiny of his administration’s crypto dealings. Investigators discovered that a small group of wallets made significant profits before LIBRA’s crash, further fueling public outrage.
A Warning for Crypto Investors and Regulators
This incident highlights the risks associated with meme coins, especially when political figures get involved. The U.S. court’s decision to freeze assets marks a critical effort to address potential fraud and safeguard investor funds.
As investigations continue, the LIBRA controversy serves as a stark reminder of the need for transparency and stronger oversight in the crypto space.
