Circle has frozen 16 wallets as part of a civil lawsuit in the U.S. However, on-chain researcher ZachXBT found that these addresses belong to entities unrelated to the case.
He examined the activity of the affected companies and discovered no connections among them.
“An analyst with basic tools could determine in a few minutes that these are operational business wallets, judging by the thousands of transactions they process,” the expert stated.
According to the researcher, the lawsuit is “sealed.” Circle had no objective grounds for freezing stablecoins.
The NY civil case is sealed and they have provided absolutely ZERO basis to freeze all of these business addresses.
— ZachXBT (@zachxbt) March 25, 2026
Aaron Nathan from Willkie Farr is the unknown plaintiffs lawyer.
The expert witness is liable.
The judge is liable.
Circle is liable.
In my 5+ yrs of…
“In over five years of investigations, this is perhaps the most incompetent freeze I have seen. This is what happens when decisions about freezes are left to some random federal judge instead of establishing their own procedures,” ZachXBT noted.
The crypto community has echoed the criticism directed at the USDC issuer. MetaMask wallet developer Taylor Monahan described the freeze as “neither the first nor the last.”
It’s always been this way for Circle.
— Tay 💖 (@tayvano_) March 24, 2026
If you can convince a US federal court to sign off on a freeze then the funds will be frozen.
This most often comes up when Circle REFUSES to freeze uncommingled stolen funds that come direct from the victim.
Their non-decision making…
“No accountability. No transparency. No way to protect your rights,” she emphasized.
As of this writing, Circle has not commented on the incident. According to ZachXBT's observations, the company has unfrozen one wallet without explanation. The researcher highlighted that market participants are awaiting official clarifications.
Recall that on March 24, shares of the USDC issuer plummeted by 20%. This drop was driven by concerns related to the latest version of the Clarity Act bill.