Onchain detective ZachXBT claims that Circle, the issuer of the USDC (USDC) stablecoin, has did not freeze or blacklist about $420 million in illicit fund flows since 2022.
Circle can freeze illicit funds and blacklist pockets addresses, however both took “minimal” motion to freeze illicit flows or did not act in 15 separate hack-and-fraud instances, together with these linked to North Korean (DPRK) state-affiliated hackers, ZachXBT stated.
The stablecoin issuer allegedly did not freeze $9 million in USDC from the GMX decentralized trade (DEX) hack in July 2025, and blacklisted wallets linked to the $200 million Cetus DEX hack in Might 2025 after USDC was transformed into Ether (ETH), based on ZackXBT.
Circle did not freeze $232 million in illicit flows from the Drift Protocol Hack on Wednesday, regardless of a six-hour window by which the attackers transformed USDC to ETH in over 100 separate transactions, he added.
“Circle builds good merchandise, and I maintain USDC myself. This is not a publish about hoping they collapse,” he stated, including that the failure to freeze these illicit flows has had “actual penalties for actual folks.” He stated:
“9 figures have been misplaced from the ecosystem due to repeated inaction throughout three years on regulation enforcement requests, non-public sector requests, and their very own infrastructure. The $420 million-plus solely accounts for main public instances. The actual determine is probably going considerably greater.”
Cointelegraph reached out to Circle however didn’t obtain a right away response by the point of publication.
The shortage of asset freezes has sparked a web-based debate within the crypto group concerning the position and obligations of centralized service suppliers, as blockchain protocols and customers proceed to be focused in hacks and cybersecurity exploits that drain funds.
Associated: ZachXBT claims Circle wrongfully freezing trade wallets
Circle explores “reversible” USDC transactions
In September 2025, Heath Tarbert, the president of Circle, stated that the corporate was exploring “reversible” USDC transactions that may very well be rolled again or amended within the occasion of hacks, theft and fraud.
Circle has frozen USDC funds and blacklisted wallets on a number of events, together with freezing USDC held by Twister Money addresses sanctioned by the US Workplace of International Belongings Management in 2022.
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