ZachXBT, one of the well-known cryptocurrency detectives, warned about one of the biggest cryptocurrencies today. US based USDC second largest stablecoin and for years it was considered much more reliable than USDT in terms of compliance with regulations. But Zach thinks that’s not exactly the case.
Is USDC trustworthy?
It emerged from the altcoins with the least peg problems and many chaos. Moreover, it is based in the USA and is the largest company in the country. crypto companies It was started with the support of It can be said that Peg is reliable. However, it does not have as good a record in terms of compliance with the law as it seems. ZachXBT, Circle’s It found over $420 million in compliance violations since 2022.
Many people give examples and say that there are large unfrozen USDC assets that need to be frozen. For example, approximately 232 million USDC bridged in the recent Drift Protocol attack incident. This freeze was not made during 6 hours of CCTP bridging over 100 transactions. The attacker was determined by Elliptic to be affiliated with North Korea (DPRK).
- 3 million in SwapNet attack (Requests for a freeze by law enforcement and private sector experts were unsuccessful. Funds were moved hours before a court order (TRO) was issued.)
- 61 million in the Cetus attack (The address was blacklisted a month later, after USDC had already been converted to ETH.)
- Approximately $57.5 million linked to the Mango Markets attack (The abuser transferred $57.5 million to his Circle account and withdrew it to Ethereum. The funds were never frozen on the network. The abuser then SEC was accused by.)
- Approximately $45M in Nomad Bridge exploit (Approximately 45M USDC was available for freezing in three wallets for 30-45 minutes before being fully exchanged. Addresses were never blacklisted.)
All 15 cases covering the years 2022-2026 are as follows;
Circle and compliance requirements
It has a strong compliance program and is marketed as the most regulatory-sensitive stablecoin for the US dollar. However, despite this, these very important events did not help save $420 million in assets. However, there is also a freeze/blacklist function in the token contract. In fact, its terms of service clearly state that it reserves the right to restrict access to anyone suspected of illegal activities “in its sole discretion.”
Other examples that came to the fore with the hacking of Drift Protocol on April 1, 2026 show that Circle is not doing its job that well in terms of compliance with the law. ZachXBT wrote:
“circle He develops good products and I hold USDC. This is not an article that I hope will sink them. But the decisions they made about integration had tangible consequences for real people. A nine-figure sum was lost from the ecosystem due to three years of repeated inaction, demands from law enforcement, demands from the private sector, and their own infrastructure.
They have every tool and resource necessary to do better. But they didn’t. So I’ll leave you with one question: Who does Circle actually serve? “A U.S. regulated public company has an obligation to its users and the broader community to do better than that.”
