Circle, a stablecoin issuer, froze $58 million in USDC linked to the LIBRA memecoin scandal in the United States.
The freeze underscores increasing regulatory scrutiny and raises questions about stablecoin issuer oversight, as the LIBRA token value sharply declines.
Circle Freezes $58M USDC Tied to LIBRA Scandal
Circle has frozen $58 million in USDC connected to the LIBRA memecoin scandal. This action follows the token’s market value plummeting by over 90%, causing significant concern in the crypto community.
The scandal involves Argentinian President Javier Milei, who initially promoted the token. The Burwick Law firm is leading a class action lawsuit against those involved, reflecting ongoing legal pressures.
Crypto Market Unfazed by Circle’s USDC Freeze
The immediate impact was a reduction in circulating USDC linked to the scandal. Market values for major cryptocurrencies such as ETH and BTC remain largely unaffected by these events.
Reactions on platforms like Twitter and Reddit discuss the implications of centralized stablecoin issuer actions on broader regulatory environments. “Circle’s inconsistent responses to fund freezes are troubling and they can’t be compared favorably to Tether.” – ZachXBT, Crypto Investigator.
Parallels Drawn to Tether’s 2022 Actions
This incident draws parallels to actions taken by Tether during the FTX bankruptcy in 2022, where funds were similarly frozen, highlighting legal and fraud contexts within the industry.
Industry experts suggest the incident will fuel discussions on increasing stablecoin issuer regulation. Prior events emphasize the importance of safeguards to prevent market instability and fraud.
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