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A Manhattan court issued a temporary restraining order, freezing approximately $57.65 million in USDC stablecoins held by Circle. This action is part of a class-action lawsuit against Kelsier Ventures and its founders, Gideon, Thomas, and Hayden Davis, along with other defendants including KIP Protocol and its CEO, Julian Peh, and Meteora and its co-founder, Benjamin Chow.
The lawsuit, filed by Omar Hurlock and others, alleges that the defendants created the Libra memecoin and misled investors, siphoning over $100 million from one-sided liquidity pools. The plaintiffs’ lawyer, Max Burwick, confirmed the freeze, stating that a hearing is scheduled for June 9th to determine if the freeze will remain in place.
The frozen USDC was held in two Solana wallets, totaling $57.65 million. One wallet held approximately $44.59 million, while the other contained over $13 million. Both wallets were frozen by the Multisig Freeze Authority.
The Libra memecoin experienced a meteoric rise and fall, reaching a $4 billion market cap after a social media post by Argentine President Javier Milei before plummeting 94% within hours. This event caused a political scandal in Argentina, with calls for Milei’s impeachment, although these gained little traction. Polling data suggests the scandal negatively impacted Milei’s image and approval ratings.
Interestingly, on May 19th, President Milei dissolved the task force investigating the Libra scandal, drawing criticism from figures like economist Itai Hagman, who alleges a lack of genuine investigation and a cover-up. This further fuels the controversy surrounding the Libra collapse and the legal action against the defendants. The outcome of the June 9th hearing will be crucial in determining the future of the frozen assets and the direction of the class-action lawsuit. The case highlights the risks and potential legal ramifications associated with the volatile world of memecoins and decentralized finance.
