ZachXBT Accuses Circle of Wrongfully Freezing 16 Wallets

Circle, the issuer of the USDC dollar stablecoin, can freeze on-chain tokens by blacklisting addresses. The power was designed to enforce sanctions and recover illicit funds, but it also leaves corporate operating funds dependent on a single company. On-chain investigator ZachXBT accused Circle of flawed screening and said it had failed to take adequate action against about $420 million in illicit USDC flows since 2022, fueling concerns about procedural transparency.

On March 23, 2026, Circle froze USDC held in 16 hot wallets belonging to crypto exchanges, online casinos and foreign-exchange businesses in connection with a U.S. civil case whose details were not disclosed. ZachXBT said the addresses were unrelated. By April 4, at least five wallets had been unfrozen, including about 131,000 USDC belonging to Goated.com, but Circle did not disclose the total amount frozen or its full rationale.