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Circle Reaffirms Court-Order-Only USDC Freezes After Drift Hack Outcry

The stance elevates calls for a legal safe harbor to let issuers act in fast-moving hacks.

Overview

  • Jeremy Allaire, speaking in Seoul on Monday, said Circle freezes USDC only when directed by law enforcement or a court and called unilateral freezes a risky moral quandary.
  • The Drift Protocol exploit on April 1 drained about $285 million, including roughly $230 million in USDC that moved across chains over several hours in an operation analysts linked to North Korea.
  • Blockchain investigator ZachXBT says Circle’s approach has let more than $420 million in identifiable illicit USDC move since 2022, citing cases where stolen funds sat in visible wallets without a freeze.
  • Tether, a rival stablecoin issuer, has often blacklisted stolen funds within hours in cases such as the Ledger and Remitano exploits and a large PdVSA-linked tranche, underscoring a policy divide.
  • Circle announced memoranda of understanding in South Korea with Dunamu and Bithumb as it explores a local presence and potential licensing under developing digital-asset rules.