Circle has frozen 16 wallets as part of a civil lawsuit in the United States. However, on-chain researcher ZachXBT discovered that these addresses belong to entities unrelated to the case.
He examined the activity of the affected companies and found that they are not connected to each other.
“An analyst with basic tools could determine in a few minutes that these are operational business wallets, judging by the thousands of transactions they process,” the expert wrote.
According to the researcher, the proceedings are “sealed.” Circle had no objective grounds for freezing stablecoins.
The NY civil case is sealed and they have provided absolutely ZERO basis to freeze all of these business addresses.
Aaron Nathan from Willkie Farr is the unknown plaintiffs lawyer.
The expert witness is liable.
The judge is liable.
Circle is liable.In my 5+ yrs of…
— ZachXBT (@zachxbt) March 25, 2026
“In over five years of investigations, this is perhaps the most incompetent freeze I’ve seen. This is what happens when the decision to freeze is left to some random federal judge instead of establishing a proper procedure,” noted ZachXBT.
The crypto community supported the criticism of the USDC issuer. MetaMask wallet developer Taylor Monahan called the freeze “neither the first nor the last.”
It’s always been this way for Circle.
If you can convince a US federal court to sign off on a freeze then the funds will be frozen.
This most often comes up when Circle REFUSES to freeze uncommingled stolen funds that come direct from the victim.
Their non-decision making…
— Tay 💖 (@tayvano_) March 24, 2026
“No responsibility. No accountability. No ways to protect your rights,” she emphasized.
At the time of writing, Circle has not commented on the incident. According to ZachXBT’s observations, the company unfroze one wallet without explanation. The researcher emphasized that market participants are awaiting official clarifications.
Back in March 24, shares of the USDC issuer plummeted by 20%. The cause was concerns related to the latest version of the Clarity Act bill.