Circle (CRCL) has responded publicly to mounting criticism tied to the exploit of Solana’s Drift Protocol, an assault that reviews say siphoned roughly $270–$285 million from the decentralized venue.
Amid backlash circulating on social media, critics allege that the USDC issuer did not cease the stolen funds, although the stablecoin has mechanisms—reminiscent of freezing and blacklisting—that can be utilized to disrupt illicit transfers.
Circle Explains USDC Freezing Course of
The timeline behind the accusations facilities on April 1, 2026, when Drift Protocol was drained of about $285 million, with the exploit reportedly representing greater than half of the protocol’s complete worth locked (TVL).
A considerable portion of the stolen belongings, in line with reporting surrounding the incident, was transformed and routed by means of USDC through Circle’s Cross-Chain Switch Protocol (CCTP).
Circle didn’t instantly reply to the web criticism. After weeks of silence, the corporate revealed an official weblog put up authored by Chief Technique Officer Dante Disparte, addressing the dispute over freezing and compliance actions.
Disparte stated Circle’s means to freeze USDC shouldn’t be discretionary in the way in which critics generally body it, arguing as a substitute that freezing is one thing Circle does solely when the legislation compels motion.
The agency’s govt wrote that “when Circle freezes USDC,” it isn’t as a result of the corporate has determined unilaterally to take away belongings from a particular social gathering. Fairly, he stated the agency freezes as a result of “the legislation requires us to behave.”
Disparte additional linked the freezing debate to a broader regulatory purpose, saying Circle is working with policymakers within the US and internationally to develop “secure harbor” frameworks and to modernize laws.
The purpose, he wrote, is to create authorized buildings that enable issuers, exchanges, and different ecosystem contributors to reply extra decisively to illicit exercise—sooner, however with out opening new pathways for abuse that might undermine open monetary methods.
ZachXBT Calls Out Freezing Rationalization
Regardless of the agency’s protection, critics have continued to problem the corporate’s place. One of many responses got here from on-chain sleuth ZachXBT, who posted “The Circle USDC Information” final week.
In that report, ZachXBT alleged greater than $420 million in compliance failures. He now addressed the weblog assertion, claiming Circle’s actions resulted in 240 million immediately funding North Korea throughout a number of hacks—whereas arguing that Circle had hours to behave in clear-cut instances involving illicit transfers.
ZachXBT’s criticism attacked the obvious mismatch between the agency’s acknowledged freeze framework and what he described as operational delays or selections to not use out there instruments shortly sufficient. He questioned Circle’s compliance file explicitly, asking, “How is that compliance for USDC?”
Lastly, ZachXBT argued that Circle’s weblog put up “contradicts itself” and attributed the controversy to a management downside, quite than a purely authorized or procedural constraint.
As of this writing, the agency’s inventory (CRCL) was buying and selling at $88.78, up 4% in Friday’s buying and selling session.
Featured picture from OpenArt, chart from TradingView.com
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