New York court orders Circle to extend freeze on assets stolen in Multichain hack

The U.S. Bankruptcy Court in New York ordered Circle to maintain the freeze on wallets containing assets stolen in the 2023 Multichain hack.

On the 31st (local time), The Block reported that Judge David S. Jones of the U.S. District Court for the Southern District of New York approved a 'provisional relief' application filed by the Multichain liquidators appointed by the Singapore court. As a result, Circle must keep three hacked wallet addresses holding $63 million worth of the stablecoin USD Coin (USDC) on its blacklist for the time being.

Circle can automatically block sending and receiving of USDC to and from specific addresses through a blacklist feature within its smart contract. The measure is a legal action to prevent transfer of the assets and to maintain the current state until the liquidation process is completed.

Multichain suffered a hack in July 2023 in which $210 million worth of cryptocurrency was stolen. Earlier this year, a Singapore court designated Multichain for liquidation following a claim by Sonic Labs, and the local liquidators are pursuing recovery of the stolen assets through U.S. courts.

Earlier, the U.S. Department of Justice issued a seizure warrant immediately after the hack requiring Circle to freeze the addresses, but later lifted the warrant after failing to identify the hacker. Accordingly, Circle had said it could not continue to freeze the wallets without legal grounds, and this ruling has extended the freeze again.