tl;dr
A New York judge extended the freeze on three Ethereum wallets holding $63 million in USDC stablecoins linked to the collapsed crypto bridge Multichain, following a request from Singapore-based liquidators. The order, issued by Judge David S. Jones, aims to prevent asset movement outside the U.S. wh...
**New York Judge Extends Freeze on $63M Stolen USDC Stablecoins in Multichain Case**
A New York judge has temporarily extended a freeze on three Ethereum wallets holding approximately $63 million in stolen USDC stablecoins, supporting a request from Singapore-based liquidators of the collapsed crypto bridge Multichain. The order, issued by Judge David S. Jones, aims to prevent potential "immediate and irreparable harm" if assets were to be moved or claimed outside the U.S., according to the liquidators.
The ruling requires Circle, the issuer of USDC, to maintain the freeze on the wallets and preserve the dollar reserves backing the stablecoin. This move comes as Singapore’s liquidators seek U.S. recognition of their case, which could enable them to recover assets tied to Multichain’s collapse. The court’s decision also pauses a separate class-action lawsuit by U.S. investors, who had previously sought control of the $63 million through litigation against Circle.
The case was recently transferred to the Southern District of New York after Circle invoked the Class Action Fairness Act, which allows large, multi-state lawsuits to be heard in federal court. The current order is provisional under Section 1519 of the U.S. Bankruptcy Code, which permits temporary asset protection measures when urgent action is needed. The court will now determine whether the Singapore liquidation qualifies as a “foreign main proceeding” under Chapter 15 of the Bankruptcy Code, a step that would authorize the liquidators to act in the U.S. to locate, preserve, and recover Multichain’s assets.
Multichain, formerly known as Anyswap, was a major cross-chain asset bridge connecting networks like Binance Chain, Avalanche, Polygon, and Ethereum. These bridges allow users to transfer tokens between blockchains without selling them, by locking assets on one network and issuing equivalent tokens on another. At its peak, Multichain’s total value locked (TVL) reached $9.2 billion in early 2022, according to DeFiLlama.
The platform’s downfall began in May 2023, when transactions froze and reports surfaced of CEO Zhaojun’s arrest in China. By July 2023, over $125 million in assets had been transferred from Multichain’s wallets in what the team called “abnormal” movements, prompting the bridge’s immediate shutdown. The incident underscored the vulnerabilities of decentralized finance (DeFi) infrastructure and sparked broader concerns about security and governance in the crypto sector.
The ongoing legal battle highlights the complexities of cross-border insolvency in the crypto space. If the Singapore liquidation is recognized, it could set a precedent for how international courts collaborate to recover assets in decentralized systems. For now, the temporary freeze ensures that the $63 million in USDC remains protected while the legal process unfolds.
As the case progresses, stakeholders await further clarity on the fate of Multichain’s assets and the broader implications for regulatory frameworks in the evolving crypto landscape.