Key Takeaways:
Onchain investigator ZachXBT identified 15 cases totaling over $420M in illicit USDC flows Circle failed to freeze promptly since 2022. The Drift Protocol exploit saw 232M USDC bridged via Circle’s own CCTP over 6 hours with no freeze during U.S. business hours. Circle froze 16 legitimate business wallets in a March 2026 civil case, including DFINITY Foundation’s ckETH Minter contract, with 5 later unfrozen. Did Circle Fail to Freeze Stolen USDC? ZachXBT Says Yes, With ReceiptsZachXBT’s post highlights the Swapnet exploit from January 25, 2026, which saw $16 million stolen, with 3 million USDC sitting accessible for two days while law enforcement and private investigators submitted temporary freeze requests that Circle denied. The funds were swapped before a court order could be obtained.
In the Cetus Protocol hack from May 22, 2025, attackers took $223 million and bridged 61 million USDC via Circle’s infrastructure over 90 minutes. Circle blacklisted the funds one month later, after they had already been converted to Ether.
ZachXBT called it potentially the single most incompetent freeze he had witnessed in more than five years of investigations. He said basic onchain analysis would have shown the wallets were active operational infrastructure with no apparent connections to each other or to the underlying civil matter.
At least five of the 16 wallets were later unfrozen, including DFINITY’s contract and Goated.com’s wallet holding roughly $131,000 USDC. More reversals were expected as of the time of reporting. Circle issued no detailed public rebuttal to the full thread as of April 4, 2026.
