Jeremy Allaire said Circle will not freeze USDC wallets without a court order or law enforcement request, responding to criticism over delayed action during major crypto exploits.
Allaire framed USDC as a regulated financial product, stating the company follows legal processes rather than intervening in real time, even when stolen funds are actively moving on-chain.
“Circle has a very, very clear performance obligation under the law,”
Said Allaire, adding:
“Circle follows the rule of law, and we are able to undertake actions such as freezing a wallet at the direction of law enforcement or the courts.”
Critics including blockchain investigator ZachXBT argue this approach has allowed more than $420 million in illicit funds to escape since 2022 due to slow response times.
Rival Tether has taken a more proactive stance, freezing funds linked to hacks within hours in several high-profile incidents where USDC remained untouched.
The debate intensified following a recent exploit linked to Drift Protocol, where roughly $230 million in USDC was moved across chains without being frozen.
Supporters of Circle’s approach argue that faster discretionary intervention could undermine decentralised finance by introducing centralised control over user funds, raising broader questions about the balance between security and decentralisation.