Quick Takeaways
- A New York judge ordered Circle to keep wallets holding stolen Multichain USDC frozen.
- The decision supports Singapore liquidators recovering $63 million in stolen assets.
- The court extended the freeze amid a cross-border bankruptcy process.
New York Judge Extends Freeze on Stolen Multichain USDC Wallets
A New York bankruptcy judge has granted provisional relief to Multichain’s Singapore-based liquidators, directing Circle to maintain the freeze on wallets holding millions in stolen USDC.
Judge David S. Jones issued the order Thursday, ensuring that three hacker-linked addresses remain blacklisted on-chain until further notice. The freeze prevents any transfer of stolen USDC, locking assets tied to the 2023 Multichain hack.
Background: The $210 Million Multichain Exploit
In July 2023, Multichain, a major cross-chain bridge protocol, suffered a massive exploit that drained over $210 million worth of crypto assets. The unidentified hackers siphoned funds from multiple chains, including $63 million in USDC.
Following the breach, Multichain entered liquidation proceedings in Singapore. The appointed liquidators have since been working to recover stolen funds and stabilize the firm’s remaining assets.
Circle Ordered to Maintain Blacklist
The latest U.S. court order instructs Circle, the issuer of USDC, to keep the hacker-controlled wallets frozen. Circle enforces freezes through a blacklist integrated into USDC’s smart contract, automatically blocking transfers involving flagged addresses.
According to the filing, provisional relief is a temporary legal standard that protects assets before a final ruling. It aims to preserve the status quo during complex, cross-border failure cases.
Legal Cooperation Across Borders
The ruling emphasises cooperation between U. S. and foreign courts under Chapter 15 failure provisions. This framework helps synchronize international insolvency cases involving shared assets and creditors.
The U.S. Department of Justice had earlier issued a seizure warrant for the same addresses but lifted it after failing to identify the hackers. Without the current order, Circle would have lacked the authority to keep the wallets frozen.
Class Action Adds Pressure
Separately, a radical U. S. investor filed a stratum action against Circle, assay ascendency of the like stolen USDC. The lawsuit prompted Circle to get a stipulation to wield the freeze, ensuring the wallets remain locked while both sound matters proceed.
The termination could set a precedent for crabby-border crypto plus recovery and highlight how courts of justice are adapting to the complexity of decentralized finance.
