ZachXBT has criticized Circle for freezing 16 wallets linked to unrelated businesses amid a sealed lawsuit, raising concerns over accountability.
Circle has come under fire for freezing 16 cryptocurrency wallets as part of an ongoing civil lawsuit in the United States. On-chain researcher ZachXBT revealed that these wallets are linked to businesses that have no relation to the legal case.
Upon investigating the transactions associated with these wallets, ZachXBT found no evidence connecting them to the lawsuit. He stated, “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.”
ZachXBT labeled the lawsuit as “sealed,” asserting that Circle lacked valid justification for freezing the stablecoins involved. He expressed his frustration on social media, pointing out that the New York civil case has provided no rationale for the sweeping freezing of business addresses, holding various parties accountable, including Circle itself.
“In over five years of investigations, this is perhaps the most incompetent freeze I have seen,” he remarked, criticizing the lack of established procedures for such actions.
The crypto community has echoed ZachXBT's sentiments, with MetaMask wallet developer Taylor Monahan highlighting that this incident is part of a troubling trend. She noted that if a federal court approves a freeze, Circle will act on it, often ignoring calls to freeze funds that are clearly stolen from victims.
“No accountability. No transparency. No way to protect your rights,” she emphasized.
As of now, Circle has not provided any comments regarding the situation, although ZachXBT noted that one wallet has been unfrozen without explanation. The crypto community is now awaiting further clarification from the company. Notably, Circle’s shares dropped 20% on March 24, amid growing concerns related to the Clarity Act bill's latest version.
