A New York judge temporarily extended a freeze on wallets holding roughly $63 million in stolen USDC stablecoins on Thursday, backing a request from Singapore liquidators of collapsed crypto bridge Multichain as they seek U.S. recognition of the case.<\/p>\n
Judge David S. Jones ordered Circle to keep three Ethereum wallets frozen and to preserve the dollar reserves backing the stolen USDC.<\/p>\n
The order would help \u201cavoid potential immediate and irreparable harm\u201d if the state court lifted Circle\u2019s freeze and let the assets move or be claimed outside, liquidators warned.<\/p>\n
It also pauses a separate class action in which a group of U.S. investors had been seeking control of the same $63 million through litigation against Circle.<\/p>\n
That case was moved from New York state court to the Southern District of New York last Friday after Circle invoked the Class Action Fairness Act, which allows large class actions with diverse parties to be heard in federal court.<\/p>\n
The order remains provisional under Section 1519 of the U.S. Bankruptcy Code, which allows courts to grant temporary relief when urgent action is needed to protect assets before a foreign case is formally recognized.<\/p>\n
In this case, the court would review whether the Singapore liquidation qualifies as a \u201cforeign main proceeding\u201d under Chapter 15, which governs cross-border cooperation in insolvency.<\/p>\n
Circle Freezes $58 Million Worth of USDC in Solana Wallets Tied to Libra Scandal<\/a><\/p>\n If recognized, it would authorize the Singapore liquidators to act in the U.S. to locate, preserve, and recover Multichain\u2019s assets under coordinated court supervision.<\/p>\n Decrypt has reached out for comment to Circle, Joel H. Levitin, the attorney for Multichain, and the three Multichain liquidators at KPMG Singapore.<\/p>\n Multichain, formerly known as Anyswap, was one of crypto\u2019s biggest cross-chain asset bridges, linking networks like Binance Chain, Avalanche, Polygon, and Ethereum.<\/p>\n A cross-chain asset bridge works by locking tokens on one chain and issuing equivalent tokens in another, allowing users to move assets between otherwise separate networks without selling or converting them.<\/p>\n $78 Million Lost to \u2018Laundering Loophole\u2019 in Tether Freezing Method Since 2017<\/a><\/p>\n At its height, the bridge had a total value locked of roughly $9.2 billion in early 2022, according to data on DefiLlama.<\/p>\n Its troubles began in May 2023 when transactions started freezing<\/a> and reports surfaced that CEO Zhaojun had been arrested<\/a> and detained in China.<\/p>\n