What to know:
- Circle freezes USDC wallets only under legal orders.
- Drift exploit intensified scrutiny over Circle’s response.
- Critics point to inconsistency in past wallet freezes.
- Korea’s expansion plans signal a broader global strategy.
Circle CEO Jeremy Allaire stated that the company does not freeze USDC wallets unless directed by law enforcement or courts. He addressed rising criticism during a press conference in Seoul on Monday, 13 April 2026.
The backlash followed concerns over Circle’s inaction in recent exploit cases. Allaire emphasized that the company operates under strict legal obligations. He said the company cannot act independently on freezing funds without official orders.
According to him, allowing a private firm to decide such actions would create serious risks. He described this situation as a complex moral challenge for any financial technology company.
The criticism intensified after questions emerged around Circle’s past actions. Some observers pointed to earlier cases where wallets were frozen without detailed explanations.
This raised concerns about consistency in enforcement. Allaire maintained that every action taken by Circle aligns with applicable laws and regulatory directives.
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Drift Exploit Fuels Community Backlash
The issue gained momentum after decentralized finance platform Drift suffered a major exploit earlier this month. Losses reached up to $280 million. Reports linked the attack to a long-term social engineering operation, likely involving North Korean actors.
A large portion of the stolen funds included around $230 million in USDC. These assets moved from Solana to Ethereum through Circle’s Cross-Chain Transfer Protocol. Critics argued that the company should have intervened and frozen those funds.
On-chain investigator ZachXBT publicly called out Circle on their response, citing that there were no definitive actions taken despite the significant nature of the problem.
Past examples of frozen wallets were cited, where the circumstances did not seem to be the same. There were comments on various social media platforms about the issue as well.
Allaire was adamant that it was important for Circle to recognize that it could not afford to circumvent the law. He made it clear that anything other than this would bring into question what Circle was trying to achieve.
Korea Expansion and Regulatory Outlook
As part of its efforts to respond to criticism, Circle has forged new relationships with South Korean partners. The company signed up with Dunamu, the firm operating Upbit, and also Bithumb.
Both these platforms represent the giants in terms of crypto trading in the region. Circle has established connections with top financial institutions in the region, including the Hana Financial Group.
This is happening against the backdrop of South Korea making progress in passing its Digital Asset Basic Act, which is meant to regulate stablecoins and the entire crypto industry.
Allaire said that discussions between the company and regulators have already commenced. Notably, he stressed that the coming regulations could help pave the way for licensed firms to conduct business within the country.
If passed, Circle is planning to establish a footprint within the nation. However, they do not plan to issue a stablecoin pegged to the Korean won.
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