Jeremy Allaire, CEO of Circle, warned that the USDC will not be frozen outside of legal issues. The decision comes amid warnings that Circle may be more aggressive in preventing piracy losses.
The Department will not freeze the USDC without a court order, male CEO Jeremy Allaire at a press conference in Seoul, South Korea. Circle still aims to remain among the most influential stablecoin issuers, but its position exposes it to potential liability in the event of hacks.
Since USDC has high liquidity and is distributed in multiple pairs and lending vaults, it is often withdrawn in attacks and exploits.
Circle had previously frozen multiple wallets, but only after Court orderas is the case with LIBRA tokens. Freezing or holding USDC now relies on specialized protocols that prevent withdrawals under their internal rules or smart contracts.
The department left the Drift Protocol hack and swap to continue
News that USDC is freeable has sparked mixed reactions in the cryptocurrency community. Overall, the ability to recover funds from hacks was seen as a positive development. Even censorship-free USDT tokens have implemented limited freezes.
in case Drift protocolSome exploit addresses were identified within the first hours of the hack, but Circle did nothing to freeze the funds. Instant swaps through DeFi allowed the scalper to hide some funds.
Drift protocol exploiter Parts of the available USDC have begun to be spent on… Buy Ethereumwhich can then be scrambled to make tracking nearly impossible.
The token freeze will slow down in 2026
Compared to previous years, token freezing decreased in 2025 and early 2026. In the past quarter, most attacks targeted DeFi protocols, which operate under much weaker supervision.
In some cases of Web3, Circle only blacklisted and froze addresses months after the exploit, and after the money had been transferred and laundered.
So far, USDC has frozen only 602 addresses, for a total of 2,886 Tether USDT wallets. In 2026, Circle froze 122 addresses, including 109 in February alone. Analysts note that Circle’s frequency and long wait times may make USDC more attractive to hackers.
The solution to Circle’s refusal to freeze funds for anything other than a court order is not to carve out a bunch of exceptions, but to create a Court of Chancery that moves at the speed of the Internet
– Nick Carter (@nic_carter) April 13, 2026
Searching for suspicious addresses is not automated or facilitated by AI; It depends on dedicated systems for notification and decision-making. As a result, researcher ZachXBT noted that cryptocurrencies have lost up to $420 million in USDC since 2022 due to their failure to act when directed to known exploit addresses.
USDC is not only stolen in major hacks. As more wallets adopt stablecoins, they also become victims of address poisoning and dust. USDC is among the tokens most targeted for exploitation due to its high adoption rate and liquidity through both DeFi and centralized exchanges.
