Circle is facing criticism from parts of the crypto community after hackers drained about $285 million from the Solana-based Drift protocol, most of which was quickly converted into USD Coin (USDC) and transferred to Ethereum.
Blockchain investigator ZachXBT alleged Circle could have acted faster to freeze the stolen assets and limit losses.
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2/ Circle operates USDC, a centralized stablecoin pegged 1:1 to USD, marketed as a regulated company with a robust compliance program.Its token contract includes a freeze/blacklist function, and its terms of service explicitly state it reserves the right to restrict access for… pic.twitter.com/Plnq6IDV6A
— ZachXBT (@zachxbt) April 3, 2026
Legal Risks and Regulatory Constraints
According to security firm PeckShield, the attacker bridged roughly $232 million in USDC using Circle’s cross-chain transfer protocol (CCTP), complicating recovery efforts. Critics argue Circle had the authority to blacklist or freeze wallets tied to suspicious activity. However, legal experts say acting without a law enforcement order could expose Circle to liability.
The initial estimated loss of today's @DriftProtocol loss is $285m. Here is the detailed breakdown: https://t.co/z3DjfN0NP1 pic.twitter.com/P84p2UVJZi
— PeckShieldAlert (@PeckShieldAlert) April 1, 2026
Circle maintained that it freezes USDC only when legally required. The incident has reignited debate about the responsibilities of centralized stablecoin issuers during fast-moving exploits.
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Analysts say the attack, suspected to involve North Korean-linked hackers, exposes a gray area between rapid intervention and due process.
Hackers Park Nearly $2B in Stolen Crypto
More than $4 billion was stolen in 255 crypto hacks last year, according to Global Ledger. Hackers now move funds within seconds of an exploit but slow the laundering process, spreading it over days or weeks and making detection harder for brokers and exchanges.
Nearly $2 billion in stolen funds from this period reportedly still sits in attacker-linked wallets, creating a sleeper threat that may hit regulated venues later and defeat point‑in‑time screening.
Criminals increasingly rely on cross-chain bridges and privacy tools, with over $2.01 billion in stolen funds routed through bridges in 2025. Tornado Cash usage rebounded after sanctions were lifted in March 2025 and was involved in nearly 75% of mixer-related hacks in the second half of the year.
These longer, more complex laundering paths are intensifying operational risks and forcing compliance teams to move beyond static blacklists toward continuous monitoring.
This article was written by Jared Kirui at www.financemagnates.com.
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