In the wake of a devastating $285 million exploit of the Solana-based Drift protocol, the crypto industry has turned its scrutiny toward Circle, the issuer of the USDC stablecoin. Critics are questioning why the company did not intervene to freeze stolen assets as they moved across blockchains in real-time, CoinDesk said in a report.
According to blockchain security firm PeckShield, the attacker initially siphoned roughly $71 million in USDC on Wednesday. The exploiter then systematically converted the bulk of other stolen assets into USDC, utilizing Circle’s Cross-Chain Transfer Protocol (CCTP) to bridge approximately $232 million from Solana to Ethereum.
The use of Circle’s own infrastructure to facilitate the “clean” exit of funds has sparked a heated debate over the responsibilities of centralized stablecoin issuers.
Prominent blockchain investigator ZachXBT led the criticism, arguing that Circle’s failure to act promptly undermines the value proposition of using a centralized stablecoin.
“Why should crypto businesses continue to build on Circle when a project with 9-figure TVL [total value locked] could not get support during a major incident?” ZachXBT posted on X.
Under its current terms of service, Circle maintains the technical capability to blacklist addresses and freeze USDC. Industry experts noted that preemptive action could have stalled the attacker, but Circle maintains that its hands are tied by the “rule of law.”
A Circle spokesperson told CoinDesk that the company is a “regulated entity” that freezes assets only when legally required by court orders or law enforcement.
The incident has highlighted a significant “safe harbor” gap in current regulation.
However, the nature of the Drift exploit adds a layer of complexity.
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The Dilemma: If Circle intervenes in a market exploit without a court order, it ceases to be “neutral infrastructure.”
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The Risk: If Circle waits for a court order, the funds—which moved in minutes—are long gone by the time the paperwork is signed.
The controversy arrives as stablecoins face unprecedented pressure from global regulators. Data from TRM Labs indicates that roughly $141 billion in stablecoin transactions were linked to illicit activity in 2025.
With security firms pointing toward North Korean state-sponsored hackers as the likely culprits behind the Drift hit, the pressure on Circle to move from a passive compliance role to an active “crypto police” force is reaching a breaking point. For now, the industry remains stuck in a costly ambiguity: a world where digital money moves at light speed, but the legal framework to stop its theft still moves at the speed of a courtroom.
