On-chain investigator ZachXBT has criticized Circle for its unacceptably slow response to numerous instances of illegal transactions involving the stablecoin USDC.

1/ Welcome to the Circle $USDC files.

Over $420M in alleged compliance failures since 2022, including fifteen cases where the US-regulated stablecoin issuer took minimal action against illicit funds. pic.twitter.com/OiWZz5MrVM

— ZachXBT (@zachxbt) April 3, 2026

According to the analyst, this involves over $420 million linked to suspicious or illegal transactions that were not promptly frozen.

ZachXBT claims that the stablecoin issuer has not consistently utilized its asset-freezing mechanism in a timely manner, despite having the technical capability to intervene at the smart contract level.

The researcher has documented 15 such cases since 2022, including the recent hack of the DeFi project Drift Protocol, which resulted in a loss of $280 million.

“The attacker used the CCTP protocol to transfer approximately 232 million USDC from Solana to Ethereum through over 100 transactions within six consecutive hours,” noted ZachXBT.

During this time, the hacker laundered funds via Circle's native cross-chain bridge, yet not a single USDC was frozen, he emphasized. According to findings from experts at Diverg, TRM Labs, and Elliptic, the attack was linked to the North Korean group Lazarus.

ZachXBT's list includes several incidents where the stablecoin issuer simply failed to respond.

For instance, in August 2022, the company had 30-45 minutes to freeze $45 million that was withdrawn from Nomad Bridge. In January 2026, criminals moved $13 million stolen from SwapNet over several hours. Circle ignored requests from on-chain investigators.

“On May 22, 2025, the Cetus protocol was hacked for $223 million. The attacker used CCTP to transfer 61 million USDC from Sui to Ethereum through over 60 transactions in just an hour and a half,” wrote ZachXBT.

Despite requests from the Cetus team and private experts to freeze the assets, Circle only blacklisted the address a month after the funds were converted to ETH, the expert noted.

“Circle builds great products, and I personally hold USDC. This post is not about hoping they fail. But the decisions they made regarding compliance have had serious consequences for real people,” concluded ZachXBT.

Recall that in March, ZachXBT accused Circle of mistakenly freezing 16 wallets in connection with a civil lawsuit in the U.S.