Circle (CRCL) has responded publicly to mounting criticism tied to the exploit of Solana’s Drift Protocol, an assault that reviews say siphoned roughly $270–$285 million from the decentralized venue.
Amid backlash circulating on social media, critics allege that the USDC issuer did not cease the stolen funds, although the stablecoin has mechanisms—resembling freezing and blacklisting—that can be utilized to disrupt illicit transfers.
Circle Explains USDC Freezing Course of
The timeline behind the accusations facilities on April 1, 2026, when Drift Protocol was drained of about $285 million, with the exploit reportedly representing greater than half of the protocol’s complete worth locked (TVL).
A considerable portion of the stolen property, in response to reporting surrounding the incident, was transformed and routed via USDC by way of Circle’s Cross-Chain Switch Protocol (CCTP).
Circle didn’t instantly reply to the net criticism. After weeks of silence, the corporate printed an official weblog publish authored by Chief Technique Officer Dante Disparte, addressing the dispute over freezing and compliance actions.
Disparte mentioned Circle’s skill to freeze USDC will not be discretionary in the best way critics generally body it, arguing as an alternative that freezing is one thing Circle does solely when the regulation compels motion.
The agency’s government wrote that “when Circle freezes USDC,” it’s not as a result of the corporate has determined unilaterally to take away property from a particular get together. Relatively, he mentioned the agency freezes as a result of “the law requires us to act.”
Disparte additional linked the freezing debate to a broader regulatory objective, saying Circle is working with policymakers within the US and internationally to develop “safe harbor” frameworks and to modernize rules.
The goal, he wrote, is to create authorized buildings that enable issuers, exchanges, and different ecosystem individuals to reply extra decisively to illicit exercise—quicker, however with out opening new pathways for abuse that might undermine open monetary programs.
ZachXBT Calls Out Freezing Clarification
Regardless of the agency’s protection, critics have continued to problem the corporate’s place. One of many responses got here from on-chain sleuth ZachXBT, who posted “The Circle USDC Files” final week.
In that report, ZachXBT alleged greater than $420 million in compliance failures. He now addressed the weblog assertion, claiming Circle’s actions resulted in 240 million instantly funding North Korea throughout a number of hacks—whereas arguing that Circle had hours to behave in clear-cut circumstances involving illicit transfers.
ZachXBT’s criticism attacked the obvious mismatch between the agency’s acknowledged freeze framework and what he described as operational delays or selections to not use obtainable instruments rapidly sufficient. He questioned Circle’s compliance file explicitly, asking, “How is that compliance for USDC?”
Lastly, ZachXBT argued that Circle’s weblog publish “contradicts itself” and attributed the controversy to a management downside, slightly than a purely authorized or procedural constraint.
As of this writing, the agency’s inventory (CRCL) was buying and selling at $88.78, up 4% in Friday’s buying and selling session.
Featured picture from OpenArt, chart from TradingView.com
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