On March 23, 2026, Circle froze 16 operating crypto business hot wallets, including wallets linked to Ranj.gg, Clank.gg, Whale.gg, Goated.com, 500 Casino, Pepperstone, FXPro, and AMarkets. According to the report, the USDC balances remained on those addresses, but the funds became unusable once the wallets were blacklisted. There was no advance notice, no visible appeals process, and no stated timeline for unfreezing.
The report, citing an investigation by Strident Citizen, says the action stemmed from a U.S. civil lawsuit whose details were largely unknown to the public. On-chain investigator ZachXBT said the affected addresses belonged to legitimate operating businesses, not hackers, sanctioned entities, or North Korean agents. He criticized Circle publicly, arguing that the company reacted quickly to a flawed request while failing to protect users in cases involving real theft and illicit flows.
How the USDC blacklist works
USDC is issued by Circle as a smart contract token on Ethereum and other chains, and the contract includes a blacklist function. Circle controls the admin key and can add addresses to that blacklist. Once listed, an address can no longer send or receive USDC. The tokens do not disappear, but they are effectively frozen until Circle removes the restriction.
The article argues that this is not a bug in the system. It is a deliberate compliance feature. Circle has long promoted that capability as proof it can cooperate with law enforcement. The dispute here is not over whether the power exists, but over how and when that power is used.
Five cases cited by ZachXBT show uneven response times
ZachXBT’s review points to a pattern across several incidents. In 2022, after sanctions were imposed on Tornado Cash, Circle froze more than $75,000 worth of USDC within hours. In February 2025, after the Bybit hack in which Lazarus Group stole $1.5 billion, ZachXBT said he contacted Circle co-founder Jeremy Allaire and asked for related addresses to be frozen. The report says ThorChain, FixedFloat, Coinex, and Bitget moved quickly, while Circle did not.
In July 2025, ZachXBT described a North Korean IT worker infiltration campaign involving crypto firms and said the operation reached an eight-figure dollar scale, with USDC used as a main payment rail. He said Circle did not detect or freeze the activity and made no public response. In the October 2025 Coinbase theft case, Circle froze four EVM addresses, but ZachXBT said those wallets held DAI rather than USDC. In the January 2026 SwapNet case, more than $3 million in USDC reportedly sat at the original theft address on Base for over eight hours before action was taken.
Comparison with Tether freeze data
The article also cites AMLBot data. It says Circle has frozen about 372 addresses to date. Tether, by comparison, has frozen more than 2,500 addresses, involving about $1.6 billion, and has worked with more than 275 law enforcement agencies. The point made in the report is not that Tether is cleaner. It is that the common market assumption about Circle being the more active anti-crime actor may not hold up under the available data.
GENIUS Act and CLARITY Act add another layer to the debate
The piece says the GENIUS Act passed in 2025 requires stablecoin issuers to have the technical ability to freeze and burn tokens when required by law. What it does not require, according to the report, is user notice before a freeze, a formal appeal process, safeguards against mistaken freezes, or mandatory action when victims are trying to recover stolen funds. The legal framework, as described there, emphasizes issuer power to comply with government demands rather than user protections.
The article also points to the CLARITY Act. Its latest text would bar platforms from offering stablecoin yield, directly or indirectly. After that language emerged, Circle shares fell about 18% in one day, while Coinbase dropped more than 8% on the same day. In the report’s framing, that market reaction reflected pressure on the broader thesis that regulated stablecoins would become core financial infrastructure.
In the specific case of the 16 business wallets, Circle’s move may have been lawful if it was responding to a court order within the U.S. legal system. The criticism centers somewhere else: the direction of enforcement. The company responded rapidly to a civil legal request, yet was described as slow or absent in major theft cases, North Korea-linked laundering activity, and on-chain movement of stolen funds. That gap is what has put Circle’s compliance narrative under fresh scrutiny.