ZachXBT releases "Circle's Inaction as an Archive": Slow response in freezing USDC during multiple major security incidents

Odaily Planet Daily News: On-chain investigator ZachXBT posted “Circle, Not for the Record” on the X platform, accusing it of potential compliance execution errors exceeding $420 million since 2022. According to his disclosure, stablecoin issuer Circle failed to freeze funds involved in multiple major security incidents in a timely manner, including Drift Protocol (April 2026, losses of $280 million), SwapNet (January 2026, losses of $16 million), Cetus Protocol (May 2025, losses of $223 million), and other cases. In addition, similar delays or failures to execute freezes also occurred in incidents involving Mango Markets, Nomad Bridge, Ledger supply chain attacks, and GMX, among others.

By comparison, peers such as Tether and Paxos responded faster in some cases. ZachXBT pointed out that although Circle has freezing and blacklist functions and is subject to U.S. regulation, it still reacted slowly to multiple enforcement actions and industry requests, resulting in significant fund outflows. He emphasized that the related statistics cover only publicly known major incidents, that the actual scale may be higher, and he questioned Circle’s actual service targets in terms of compliance enforcement.