Circle faces harsh critique over compliance failures and $420 million losses
Well-known analyst ZachXBT has strongly criticized Circle for repeated compliance failures: since 2022, there have been at least 15 incidents with losses exceeding $420 million, during which Circle could have frozen stolen USDC but responded too late or did nothing at all.
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The most notable case was the recent Drift Protocol hack, where a hacker withdrew $230 million in USDC through Circle’s bridge over six hours without any company intervention.
ZachXBT also recalled similar delayed responses after the Nomad Bridge and Mango Markets breaches, noting that even Tether usually reacts more swiftly in such crises.
Circle, founded in 2013, is a fintech company best known for issuing USDC, a stablecoin pegged to the US dollar. The company provides digital asset issuance, processing, and management services aiming to facilitate secure and transparent transactions.
This cycle of criticism highlights Circle’s slow response to security threats, casting doubt on USDC’s reliability in critical moments and posing challenges to user and investor trust.
Going forward, Circle needs to strengthen its compliance procedures and accelerate incident responses to maintain its market position and protect the reputation of its stablecoin.
