Crypto and blockchain investigator ZachXBT alleges that Circle, the issuer of the USDC stablecoin, should do better at freezing funds used in illegal activity, according to a long thread posted to X on Friday.
In their report, ZachXBT cited 15 cases involving over $420 million. The most recent case the online sleuth pointed to was this week's Drift Protocol exploit, worth more than $280 million.
"The exploiter used CCTP to bridge approximately 232 million USDC from Solana to Ethereum across 100+ transactions over six consecutive hours. 10+ additional DeFi protocols across the Solana ecosystem were indirectly impacted," ZachXBT said. "Despite the attacker laundering funds over six consecutive hours across Circle's own native bridge, no USDC was frozen."
Blockchain analytics firm Elliptic said it identified multiple indicators suggesting that the Democratic People's Republic of Korea is behind the Drift exploit.
ZachXBT's long list of incidents is part of a larger claim that Circle markets USDC as a safer, U.S.-based, more regulated alternative to Tether’s USDT.
"Circle is a regulated company that complies with sanctions, law enforcement orders, and court-mandated requirements," a spokesperson told The Block. "We freeze assets when legally required, consistent with the rule of law and with strong protections for user rights and privacy. This incident [Drift] underscores the need for stronger shared security, accountability, and lawful coordination across the digital asset ecosystem.”
ZachXBT outlined several other cases, including the Cetus Protocol exploit from last May, valued at $223 million, according to the online sleuth.
"The exploiter used CCTP to bridge 61 million USDC from Sui to Ethereum across 60+ transactions over 1.5 hours. Both the Cetus team and private sector experts requested Circle to freeze the theft address," according to ZachXBT. "Circle blacklisted the address one month later, after the USDC had already been converted to ETH."
As the world’s second-largest stablecoin issuer, Circle’s USDC has a circulating supply of over $77 billion, according to The Block's stablecoin data.
Expand Chart
Like other stablecoin providers, Circle has said clearer U.S. regulations could accelerate adoption and help position USD-pegged stablecoins as a core part of the financial system.
"Circle builds good products, and I hold USDC myself. This isn't a post about hoping they collapse," said ZachXBT in closing. "But the decisions they've made around compliance have had real consequences for real people ... The $420M+ figure only accounts for major public cases. The real figure is likely significantly higher. They have every tool and resource available to do better. They just haven't ... A U.S.-regulated public company owes it to its users and the broader community to do better than this."
Earlier this year, ZachXBT joined the research-driven crypto investment firm Paradigm as an incident response advisor.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.