ZachXBT alleges Circle failed to freeze ~$420M in illicit USDC across 15 cases — also froze 16 legitimate business wallets

first published 2026-04-04T07:19:45Z

Researcher ZachXBT claims Circle did not freeze or blacklist roughly $420 million in illicit USDC tied to 15 hack and fraud cases since 2022. Examples cited include about $9M from the GMX hack, Cetus funds that were blacklisted only after conversion to Ether, and an incident where attackers moved roughly $232M from Drift over six hours. ZachXBT says Circle took “minimal” or no action despite law‑enforcement and private requests and visible on‑chain activity. The allegations reignited debate over stablecoin issuers’ duties and timing; Circle previously froze USDC tied to sanctioned Tornado Cash addresses and is reportedly studying “reversible” transactions. Circle did not provide an immediate comment to reporters.

AI Analysis

Allegation that Circle failed to freeze or blacklist ~ $420M in illicit USDC across 15 cases, with concrete examples (GMX ~$9M, Cetus conversion to ETH, Drift ~$232M moved over six hours) and claims of minimal/no action despite requests. Circle has frozen some addresses previously and is studying reversible transactions, but offered no immediate comment — facts that could affect trust in USDC and market behavior in the short term.

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