$420 Million Illicit Funds Transferred Without Action, Circle Faces Scrutiny

Circle, a leading provider of stablecoins, is under scrutiny after being accused by ZachXBT of failing to take action on multiple instances of illicit funds transfers. According to ZachXBT, approximately $420 million in suspicious transactions went unnoticed or unaddressed since 2022, sparking concerns about Circle's compliance practices.

The allegations point to several high-profile hacks and exploits, including the Drift Protocol hack in April 2026, where hackers stole $280 million and transferred $232 million USDC without any action being taken by Circle. Similarly, the Cetus Protocol hack in May 2025 resulted in $61 million USDC being transferred within 90 minutes, with Circle only blacklisting the wallet a month later.

ZachXBT has contrasted Circle's delayed response to similar incidents handled by rival Tether, which often freezes funds promptly. The situation highlights the importance of swift action and effective monitoring systems in preventing crypto-related crimes.