Circle (CRCL) has responded publicly to mounting criticism tied to the exploit of Solana’s Drift Protocol, an assault that studies 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, though the stablecoin has mechanisms—comparable to 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 belongings, based on reporting surrounding the incident, was transformed and routed by way of USDC through Circle’s Cross-Chain Switch Protocol (CCTP).
Circle didn’t instantly reply to the web criticism. After weeks of silence, the corporate revealed 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 just isn’t discretionary in the best way critics typically body it, arguing as an alternative that freezing is one thing Circle does solely when the regulation compels motion.
The agency’s govt wrote that “when Circle freezes USDC,” it isn’t as a result of the corporate has determined unilaterally to take away belongings from a particular get together. Somewhat, he mentioned the agency freezes as a result of “the regulation requires us to behave.”
Disparte additional linked the freezing debate to a broader regulatory objective, saying Circle is working with policymakers within the US and internationally to develop “protected harbor” frameworks and to modernize rules.
The purpose, he wrote, is to create authorized constructions that permit issuers, exchanges, and different ecosystem contributors to reply extra decisively to illicit exercise—quicker, however with out opening new pathways for abuse that would undermine open monetary techniques.
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 Recordsdata” 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 decisions to not use accessible instruments shortly sufficient. He questioned Circle’s compliance document 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, moderately 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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