$420M in Question: ZachXBT Claims Circle Failed to Act on Fraud Cases

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Circle is under siege, with ZachXBT claiming a mind-boggling $420 million of illicit funds have been swept under the rug while fraud cases have been met with nothing but crickets.

ZachXBT, the self-appointed crypto watchdog, has decided to raise a ruckus over Circle, the proud operator of USDC, and its glaring inaction regarding some $420 million in illicit funds. This, naturally, raises the ever-so-important question: How are businesses entrusted with handling millions, or dare we say billions, of dollars while leaving the back door wide open for fraud?

Circle Faces Questions Over Handling of Illicit Crypto Funds

Ah, Circle. A regulated gem in the United States. The beacon of security for its USDC, pegged at a rock-solid 1:1 with the almighty dollar. A company with the power to freeze funds and block suspicious wallets at will. And yet, here we are, with ZachXBT boldly declaring that Circle has utterly failed to make use of these allegedly powerful tools.

Apparently, Circle has done very little about 15 notable frauds, most of them involving North Korean-affiliated hackers. As a result, a staggering sum of money simply flowed freely, untouched, unbothered, and unblocked. It’s almost as if compliance practices were a distant dream rather than a corporate reality.

Oh, but wait-there’s more! Circle’s wallet blacklist feature is supposed to prevent these very transfers, yet attackers allegedly bypassed the system by using their own Circle wallets. Ah yes, the speed of response and the monitoring system that everyone thought worked… Not quite.

Major Hacks Highlight Delays in Response and Action

Let’s talk about the Drift Protocol hack of April 2026, which was one for the history books. A mere $280 million was stolen, with $232 million in USDC whisked away. Over 100 transactions in a span of just six hours, and yet Circle couldn’t manage to freeze a single cent during that period. A stellar display of speed, wouldn’t you say?

And let’s not forget the Cetus Protocol case from May 2025. Hackers made off with $61 million in USDC in a mere 90 minutes. The cherry on top? Circle only decided to blacklist the wallet a whole month later, after the money had already been converted to Ethereum. A well-timed move, indeed.

Then, in January 2026, SwapNet fell victim to a hack that drained $16 million. One would assume Circle could freeze the funds, right? Well, the attacker’s wallet had $3 million of USDC for two whole days before Circle finally got around to doing anything. Orders to freeze the funds were issued but were about as prompt as a sloth on a lazy day.

Let’s not forget the GMX hack in July 2025. Circle, once again, allegedly failed to freeze the stolen $9 million. The ever-expanding list of delays has left users and experts scratching their heads, wondering if Circle is just allergic to quick action.

ZachXBT, ever the critic, has also pointed out the glaring differences in how competitors handle similar situations. Take Tether, for instance. During major events, Tether freezes funds within hours. Circle? Well, they seem to take a more leisurely approach. A classic case of “better late than never.”

Circle Under Spotlight as Trust and Security Concerns Emerge

Circle has yet to address these claims publicly. However, the company insists it follows strict compliance rules and collaborates with law enforcement when needed. One might be inclined to say, “Where was that collaboration when millions were being funneled out the back door?”

But, wait! The $420 million is only the official figure. ZachXBT is almost certain the actual amount is far higher. A comforting thought, isn’t it? A deep well of unaddressed fraud that goes beyond the eyes of regulators.

In the grand scheme of things, this episode highlights the critical importance of swift action when it comes to crypto security. Circle’s mishaps serve as a timely reminder that companies need robust systems and an ability to react faster than a crypto wallet gets hacked. With digital assets growing, the bar for security is only going to rise.

So, what’s next for Circle? Well, they’re under pressure to improve their response times and tighten up compliance. Meanwhile, ZachXBT continues to unearth vulnerabilities that could undermine user trust. With crypto’s rising tide, more aggressive regulation and faster response times are looking more like an inevitability than an option if we’re to prevent another free-for-all in the digital asset economy.

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2026-04-04 19:28