Circle CEO says he won’t freeze USDC without a court order even as hackers walk away with millions
Circle defends its hands-off approach to freezing funds as critics point to hundreds of millions in losses tied to delayed action.
What to know:
- Jeremy Allaire said Circle freezes USDC wallets only when directed by law enforcement or courts, not in real time during hacks.
- Critics including ZachXBT claim delays have allowed over $420 million in illicit funds to escape since 2022.
- Some experts argue faster freezes would undermine DeFi by giving stablecoin issuers too much discretionary power.
“Circle has a very, very clear performance obligation under the law,” Allaire said. “Circle follows the rule of law, and we are able to undertake actions such as freezing a wallet at the direction of law enforcement or the courts.”
Allaire framed USDC as part of the traditional financial system, subject to legal process and oversight. Decisions to blacklist or freeze funds, he suggested, should not be made at the discretion of the company in the heat of an exploit, but instead follow requests from law enforcement or court orders. The approach reflects Circle’s broader strategy to align closely with regulators and institutions.
Rival Tether, the issuer of the world’s largest stablecoin, USDT, has a more proactive approach. The company has repeatedly frozen funds linked to hack and illicit activity within hours. In several cases cited by blockchain sleuth ZachXBT, including exploits affecting Ledger and Remitano, Tether blacklisted stolen funds while equivalent USDC remained untouched.
