Circle blocked 16 wallets in connection with a civil litigation case in the United States. Critics say the move was a mistake.
The stablecoin issuer froze the wallets on March 23. The company said the action tied to an ongoing US legal proceeding.
But on-chain detective ZachXBT disputed this. He noted the named wallets had no connection to the case. Instead, they handled routine business operations.
According to recent data, the addresses belonged to crypto exchanges, online casinos, and currency exchange platforms. ZachXBT pointed out the addresses had no links to one another. Transaction analysis showed thousands of regular payments. He argued that even an analyst with basic tools could quickly identify these as company operational wallets.
What Is the Complaint?
The researcher called the freeze one of the most incompetent actions he had seen in more than five years of work. He emphasized the case remains sealed. Circle had no objective basis for the block.
One wallet has already been unfrozen without explanation.
Previously, ZachXBT noted cases where Circle did not move quickly to freeze wallets linked to North Korea’s Lazarus Group. In other situations, the company acted promptly on requests from US authorities.
Between 2023 and 2025, Circle froze 109 million USDC▲$0.9999 across 372 addresses.
Community Reaction
Critics say the ability to centrally freeze stablecoins runs counter to cryptocurrency principles.
MetaMask developer Taylor Monahan supported the criticism. She stated this is not the first time such incidents have occurred. She added that they highlight the lack of accountability and user protections.
At the time of publication, Circle had not provided an official comment on the incident.
