On-Chain Investigator ZachXBT Alleges Over $420 Million in Potential Losses Due to Circle's Inaction Since 2022

On-chain investigator ZachXBT released a “Circle Inaction File” on the X platform, alleging that the stablecoin issuer Circle failed to freeze illicit funds in a timely manner during multiple major security incidents. These incidents include Drift Protocol (April 2026, $280 million lost), SwapNet (January 2026, $16 million lost), and Cetus Protocol (May 2025, $223 million lost), among others. Furthermore, similar delays or failures to execute freezes were observed in incidents involving Mango Markets, Nomad Bridge, the Ledger supply chain attack, and GMX.

In contrast, peers like Tether and Paxos responded more quickly in some of these cases. ZachXBT pointed out that despite Circle possessing freeze and blacklist capabilities and being subject to US regulation, it reacted slowly to numerous law enforcement and industry requests, leading to significant fund outflows. He emphasized that the statistics presented only cover major public events, and the actual scale of losses could be higher, raising questions about Circle’s actual beneficiaries in its compliance execution.