On-chain detective ZachXBT has criticized Circle for its unacceptably slow response to numerous cases of illegal activities involving the stablecoin USDC.
1/ Welcome to the Circle $USDC files.
$420M+ in alleged compliance failures since 2022, including fifteen cases of the US-regulated stablecoin issuer taking minimal action against illicit funds. pic.twitter.com/OiWZz5MrVM
— ZachXBT (@zachxbt) April 3, 2026
According to the analyst, the issue involves more than $420 million linked to suspicious or illegal transactions that were not promptly blocked.
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.
The researcher has compiled 15 such cases since 2022, including the recent hack of the DeFi project Drift Protocol involving $280 million.
“The attacker used the CCTP protocol to transfer approximately 232 million USDC from Solana to Ethereum in over 100 transactions over six consecutive hours,” noted ZachXBT.
The hacker was able to launder funds through Circle’s native cross-chain bridge without any USDC being frozen, he emphasized. According to findings by Diverg, TRM Labs, and Elliptic, the attack was attributed to the North Korean group Lazarus.
ZachXBT’s list includes several incidents to which the stablecoin issuer simply did not respond.
For instance, in August 2022, the company had 30-45 minutes to freeze $45 million withdrawn from Nomad Bridge. In January 2026, perpetrators moved $13 million stolen from SwapNet over several hours. Circle ignored requests from on-chain researchers.
“On May 22, 2025, the Cetus protocol was hacked for $223 million. The attacker used CCTP to transfer 61 million USDC from Sui to Ethereum in over 60 transactions within an hour and a half,” wrote ZachXBT.
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.
“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,” concluded ZachXBT.
Back in March, ZachXBT accused Circle of mistakenly freezing 16 wallets as part of a civil lawsuit in the United States.