Circle will not freeze USDC without court order

Speaking at a press conference in Seoul, Circle CEO Jeremy Allaire said the company will not freeze USDC unless a court issues an order. He said Circle will follow judicial directives rather than act unilaterally to block wallets.

Allaire addressed the company’s exposure when hacks occur and its role as a major stablecoin issuer. He noted that freezes or holds on tokens increasingly happen through protocol-level controls or smart contracts that block withdrawals under their own rules.

Circle has previously frozen wallets after court orders, including actions tied to the LIBRA token matter. The issuer has not adopted a policy of proactively freezing addresses outside of legal directives.

Data compiled by analysts show Circle has frozen 602 addresses to date. By comparison, Tether has frozen 2,886 wallets. In 2026, Circle recorded 122 freezes, with 109 of those occurring in February.

In the Drift Protocol exploit, some addresses linked to the hack were identified within hours but Circle did not freeze the USDC held by those addresses. Observers reported the exploiter used decentralized finance swaps to convert USDC to ETH and routed funds through mixing services, which complicated later tracing and recovery.

Researchers say scanning for suspicious addresses is not fully automated at the network level and that decisions to blacklist or freeze addresses often rely on ad hoc notification systems and manual review. Researcher ZachXBT estimated as much as $420 million in USDC may have been lost since 2022 because known exploit addresses were not acted on quickly.

Technical limits also affect what an issuer can do on decentralized systems. Some protocols include built-in controls that can halt withdrawals or blacklist addresses, but many decentralized applications run under governance or smart-contract rules that do not allow a centralized freeze.

On social media, crypto researcher Nic Carter proposed a legal fix, writing: “The solution to Circle refusing to freeze funds for anything other than a court order is not to carve out a bunch of exceptions, it’s to create a Chancery-style court able to move at the speed of the internet.”

Allaire’s statement places responsibility for emergency freezes on courts and on protocol governance, and Circle says it will respond to legal orders and to mechanisms embedded in protocols.