New York Court upholds order to freeze 63 million USDC in Multichain case

The New York court has issued a temporary order under Section 1519, requiring Circle to continue freezing three Ethereum wallets containing approximately 63 million USDC that were stolen — at the request of Multichain liquidation units in Singapore.

Judge David S. Jones directed Circle to preserve both the wallet and the corresponding amount of USD reserves, in order to “avoid immediate and irreparable harm” if the freeze order is lifted.

This order also temporarily halts another class action lawsuit from a group of American investors disputing ownership of the same amount of money. The case has been transferred to the U.S. District Court for the Southern District of New York after Circle cited the Class Action Fairness Act.

The case is seen as a test to determine whether the liquidation process of Multichain in Singapore qualifies as a “foreign main proceeding” under Chapter 15 of the U.S. Bankruptcy Code. If approved, the Singapore liquidators will have the authority to trace, protect, and recover Multichain assets in the U.S. under the court's supervision.

Multichain, formerly known as Anyswap, was one of the largest cross-chain bridges, connecting networks such as Binance Chain, Avalanche, Polygon, and Ethereum. The platform collapsed after CEO Zhaojun was arrested in China, and over 125 million USD was withdrawn from the project's wallet in “unusual” transactions in mid-2023.