A New York judge on Thursday temporarily extended a freeze on wallets containing approximately $63 million in stolen USDC stablecoins, supporting a request by Singapore liquidators of the collapsed Multichain crypto bridge as they seek recognition of the case by the United States.
Judge David S. Jones tidy Circle to keep three Ethereum wallets frozen and preserve the dollar reserves backing the stolen USDC.
The order would help “avoid potential immediate and irreparable harm” if the state court lifted Circle’s freeze and allowed assets to be moved or reclaimed overseas, the liquidators warned.
Also pause a separate class action in which a group of American investors had been seeking control of the same $63 million through litigation against Circle.
That case was moved from New York state court to the Southern District of New York last Friday after Circle invoked the Fairness in Class Actions Act, which allows large class-action lawsuits with multiple parties to be heard in federal court.
The order remains provisional according to 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.
In this case, the court would review whether the Singapore liquidation qualifies as a “foreign main proceeding” under Chapter 15, which governs cross-border cooperation in insolvency cases.
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If recognized, it would authorize Singapore liquidators to act in the US to locate, preserve and recover Multichain’s assets under coordinated judicial supervision.
Decipher has contacted Circle, Joel H. Levitin, Multichain’s lawyer, and Multichain’s three liquidators at KPMG Singapore for comment.
Multichain, formerly known as Anyswap, was one of the largest cross-chain asset bridges in cryptocurrencies, uniting networks such as Binance Chain, Avalanche, Polygon, and Ethereum.
A cross-chain asset bridge works by locking tokens on one chain and issuing equivalent tokens on another, allowing users to move assets between otherwise separate networks without selling or converting them.
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At its peak, the bridge had a total locked value of about $9.2 billion as of early 2022, according to data in DefiLlama.
His problems began in May 2023 when transactions started to freeze and reports emerged that CEO Zhaojun had been arrested and detained in China.
In July of the same year, more than $125 million in assets were excited of Multichain wallets in what the team described as “abnormal” transfers to unknown addresses, prompting an immediate shutdown of its bridging operations.