Libra Ordeal Deepens: Milei’s Backed Token Triggers $57M USDC Freeze
US company says NY judge froze $57.6 M USDC; Argentine victims credit their Buenos Aires court order. Dispute follows collapse of “libra” token, once backed by Argentina’s Milei in the middle of scams and bribery claims. At the center of a legal tug-of-war, two versions dispute over who ordered the freeze of $57.6 million in USDC kept in two digital wallets. Burwick Law, a US company focusing on token disputes, said a judge in the Southern District of New York released the freeze last week. However, Argentine victims claim they got a court order in Buenos Aires that triggered United States authorities to act.
At Burwick Law’s office in New York, attorney Tim Treanor posted an update on social media explaining that a federal judge signed a temporary restraining order. Meanwhile, in Buenos Aires, Martín Romeo insisted that he and other plaintiffs filed a request with Argentinian courts back on April 13. He stated Judge María Servini sent an official request to United States law enforcement, which led Circle to block the funds. Romeo pledged to share documents this Thursday to support his version.
The frozen wallets still hold USDC but can move other assets like SOL and meme tokens. Freezing does not equate to recovering. Data specialist Fernando Molina mentioned that the funds remain out of reach until a court decision or settlement, and that any transaction involving those wallets now requires special approval.
Since February, the token “libra” made headlines when Argentina’s president, Javier Milei, publicly endorsed it. At launch, the token was intended to assist small businesses and startups. Promoters claimed the token could offer fast, inexpensive transfers for merchants. Subsequently, its market value soared past $2 billion. However, after major holders withdrew liquidity, the token plummeted by over 90%. Following this decline, Milei retracted his support and clarified he never intended to encourage investments in the project.
In Argentina, local lawyers filed fraud charges against Milei. Additionally, Hayden Davis, CEO of Kelsier Ventures, alleged he paid Milei’s sister to secure the president’s endorsement. Critics argue that the token’s downfall served as a ploy to enrich insiders.
Investigations persist on both sides of the border. Circle, a significant issuer of USDC, has maintained the funds in place while courts resolve the conflicting orders. Currently, neither party has recovered the frozen assets. Romero and his co-plaintiffs await confirmation from US authorities regarding the Argentinian request. Conversely, Burwick Law stands by its assertion that the Southern District of New York took action first.
In the upcoming days, documents from Judge Servini’s office should clarify whether Argentinian courts or a New York judge prompted the freeze. Until then, owners of the frozen wallets remain unable to transfer their USDC, even if they hold other tokens. Overall, this case underscores the intricacy of cross-border crypto disputes, demonstrating that divergent legal systems can impede millions without a clear resolution.
