Court extends freeze on $63M in Multichain USDC wallets
Judge David S. Jones ordered Circle to keep three hacker-controlled wallets blacklisted, extending a freeze on about $63 million in USDC tied to Multichain.
A New York bankruptcy court order issued Thursday directs Circle to keep three hacker-controlled cryptocurrency wallets blacklisted, maintaining a freeze on about $63 million in USDC tied to Multichain Foundation Ltd. Judge David S. Jones signed the provisional order at the request of liquidators based in Singapore.
The order prevents any transfers to or from the three addresses by requiring Circle to leave the wallets on USDC's built-in blacklist. Circle enforces such freezes by adding addresses to the USDC smart contract blacklist, which automatically blocks token transfers.
Multichain's liquidators filed for provisional relief in the U.S. on Oct. 23 to extend existing freezes while cross-border insolvency proceedings continue. The filing described provisional relief as an 'effective mechanism' to implement chapter 15 policies that promote cooperation between U.S. courts and foreign courts.
U.S. prosecutors obtained a seizure warrant soon after Multichain's July 2023 hack and compelled Circle to freeze the addresses. The Department of Justice later informed Circle it would lift the warrant after investigators could not identify the hackers. The liquidators' filing noted that without a valid seizure warrant or court order, Circle would lack a legal basis to keep the addresses blacklisted.
A separate class action filed by U.S. investors seeks control of the USDC held in the same wallets. The plaintiffs and Circle entered a stipulation requiring the wallets remain frozen while the liquidation and the class action proceed.
As GNCrypto covered previously, Multichain's cross-chain bridge was exploited in July 2023, with about $210 million stolen. After a petition by Sonic Labs, Multichain entered liquidation in Singapore earlier this year. Following a 2 USDC test transfer, roughly $125 million of assets moved into new wallets and the protocol was paused while investigators examined whether control of private key fragments allowed the transfers.
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