On-chain investigator ZachXBT has printed an in depth investigation alleging delays or failures in USDC stablecoin issuer Circle to freeze theft proceeds value over $420 million since 2022.
Dubbed the “Circle $USDC recordsdata,” the X thread highlights 15 circumstances through which the corporate took little to no motion relating to illicit funds.
USDC issuer Circle faulted for $420M regulatory complacency
Among the many highlighted circumstances is the latest: the $285M Drift Protocol exploit, which has since induced a domino impact on 20 different Solana-based tasks. ZachXBT famous a 6-hour delay in Circle’s motion, throughout which the hacker laundered a number of batches of USDC.
In the identical yr, $3M (in USDC) of the $16M stolen from SwapNet sat within the hacker’s handle for two days. Legislation enforcement and personal entities requested a short lived freeze, which Circle didn’t honor.
In one other main case, the North Korean cybercrime syndicate referred to as the Lazarus Group stole $1.5 billion within the February 2025 Bybit hack. Whereas Tether froze the related addresses inside hours, Circle allegedly waited a further 24 hours earlier than performing.Different studies element thefts starting from $200,000 to $223 million. Issuers delayed freezes for as much as 4 months, whereas some by no means froze addresses related to unhealthy actors in any respect.
Supply: X
One person famous the irony in Circle’s inaction, saying that blocking these addresses would have acted to their benefit.
Regulatory infringement within the crypto business
Circle is the most recent notable crypto participant allegedly defying regulatory mandates associated to illicit fund flows. Others are Binance and, even the Trump-associated World Liberty Monetary, each being accused of Iran-linked flows.
The information brings into query Circle’s trustworthiness, particularly contemplating that USDC is the second-largest stablecoin globally. The corporate had additionally reported constructing a compliance engine in 2024, however its use appears to have fallen by means of.
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