{"id":95905,"date":"2026-04-03T20:51:04","date_gmt":"2026-04-03T17:51:04","guid":{"rendered":"https:\/\/u1f987.com\/en\/?p=95905"},"modified":"2026-04-03T20:55:17","modified_gmt":"2026-04-03T17:55:17","slug":"zachxbt-criticizes-circle-for-delays-in-freezing-420-million-in-illicit-usdc-funds","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/zachxbt-criticizes-circle-for-delays-in-freezing-420-million-in-illicit-usdc-funds\/","title":{"rendered":"ZachXBT Criticizes Circle for Delays in Freezing $420 Million in Illicit USDC Funds"},"content":{"rendered":"<p>On-chain detective ZachXBT has criticized Circle for its unacceptably slow response to numerous cases of illegal activities involving the <a href=\"https:\/\/u1f987.com\/en\/news\/what-are-stablecoins\">stablecoin<\/a> USDC.<\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">1\/ Welcome to the Circle <a href=\"https:\/\/twitter.com\/search?q=%24USDC&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$USDC<\/a> files.<\/p>\n<p>$420M+ in alleged compliance failures since 2022, including fifteen cases of the US-regulated stablecoin issuer taking minimal action against illicit funds. <a href=\"https:\/\/t.co\/OiWZz5MrVM\">pic.twitter.com\/OiWZz5MrVM<\/a><\/p>\n<p>\u2014 ZachXBT (@zachxbt) <a href=\"https:\/\/twitter.com\/zachxbt\/status\/2040055757211885953?ref_src=twsrc%5Etfw\">April 3, 2026<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>According to the analyst, the issue involves more than $420 million linked to suspicious or illegal transactions that were not promptly blocked.<\/p>\n<p>ZachXBT claims that the stablecoin issuer does not always promptly use the asset freezing mechanism, despite having the technical capability to intervene at the smart contract level.<\/p>\n<p>The researcher has compiled 15 such cases since 2022, including the recent hack of the DeFi project Drift Protocol <a href=\"https:\/\/u1f987.com\/en\/news\/drift-protocol-on-solana-loses-280m\">involving $280 million<\/a>.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;The attacker used the <a href=\"https:\/\/u1f987.com\/en\/news\/circle-accelerates-usdc-cross-chain-transfers-to-mere-seconds\">CCTP<\/a> protocol to transfer approximately 232 million USDC from <a href=\"https:\/\/u1f987.com\/en\/news\/what-is-solana-sol\">Solana<\/a> to Ethereum in over 100 transactions over six consecutive hours,&#8221; noted ZachXBT.<\/p>\n<\/blockquote>\n<p>The hacker was able to launder funds through Circle&#8217;s native <a href=\"https:\/\/u1f987.com\/en\/news\/what-are-cross-chain-bridges\">cross-chain bridge<\/a> without any USDC being frozen, he emphasized. According to findings by Diverg, TRM Labs, and Elliptic, the attack was <a href=\"https:\/\/u1f987.com\/en\/news\/north-korean-hackers-linked-to-280-million-drift-defi-protocol-breach\">attributed to<\/a> the North Korean group <a href=\"https:\/\/flogstat.site\/cryptorium\/chto-izvestno-o-lazarus-group-podozrevaemoj-vo-vzlome-bybit\/\">Lazarus<\/a>.<\/p>\n<p>ZachXBT&#8217;s list includes several incidents to which the stablecoin issuer simply did not respond.<\/p>\n<p>For instance, in August 2022, the company had 30-45 minutes to freeze $45 million <a href=\"https:\/\/u1f987.com\/en\/news\/hackers-drain-nomad-cross-chain-protocol-of-over-90-million\">withdrawn from Nomad Bridge<\/a>. In January 2026, perpetrators moved $13 million stolen from SwapNet over several hours. Circle <a href=\"https:\/\/u1f987.com\/en\/news\/zachxbt-criticizes-circles-inaction-following-16-8-million-swapnet-hack\">ignored<\/a> requests from on-chain researchers.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;On May 22, 2025, the Cetus protocol was hacked <a href=\"https:\/\/u1f987.com\/en\/news\/hackers-drain-11m-from-cetus-pool-on-sui\">for $223 million<\/a>. The attacker used CCTP to transfer 61 million USDC from <a href=\"https:\/\/u1f987.com\/en\/news\/sui-an-ambitious-blockchain-and-cryptocurrency-from-meta-alumni\">Sui<\/a> to Ethereum in over 60 transactions within an hour and a half,&#8221; wrote ZachXBT.<\/p>\n<\/blockquote>\n<p>Despite requests from the Cetus team and private experts to freeze the assets, Circle blacklisted the address only a month after the funds had been converted to ETH, the expert noted.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;Circle builds good products, and I myself hold USDC. This post is not about hoping they fail. But the compliance decisions they have made have had serious consequences for real people,&#8221; concluded ZachXBT.<\/p>\n<\/blockquote>\n<p>Back in March, ZachXBT <a href=\"https:\/\/u1f987.com\/en\/news\/zachxbt-accuses-circle-of-wrongfully-freezing-16-wallets\">accused Circle<\/a> of mistakenly freezing 16 wallets as part of a civil lawsuit in the United States.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On-chain detective ZachXBT has criticized Circle for its unacceptably slow response to numerous cases of illegal activities involving the stablecoin USDC.<\/p>\n","protected":false},"author":1,"featured_media":95906,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"ZachXBT criticizes Circle for slow response to illegal USDC activities.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1220,1637,1138,167,910],"class_list":["post-95905","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-circle","tag-compliance","tag-opinions","tag-research","tag-usdc"],"aioseo_notices":[],"amp_enabled":true,"views":"3","promo_type":"1","layout_type":"1","short_excerpt":"ZachXBT criticizes Circle for slow response to illegal USDC activities.","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/95905","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=95905"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/95905\/revisions"}],"predecessor-version":[{"id":95907,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/95905\/revisions\/95907"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/95906"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=95905"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=95905"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=95905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}