Onchain investigator ZachXBT claims that Circle failed to freeze or blacklist approximately $420 million in illicit USDC transactions since 2022. The allegations span 15 separate hack and fraud incidents, including cases linked to state-affiliated cyber actors.

Specific examples include $232 million in flows from the Drift Protocol exploit, where funds were reportedly moved across more than 100 transactions within a six-hour window, and $9 million from the GMX hack in 2025. According to the analysis, enforcement actions such as wallet blacklisting were either delayed or occurred only after funds had already been converted into other assets.