ZachXBT sharply criticized Circle after it was revealed that the stablecoin issuer unfroze the USDC balance in one of the 16 wallets it had blocked days earlier in a controversial compliance measure. The address “0x61f…e543”, linked to Goated.com, regained access to its funds, which according to Arkham data amount to approximately 130,966 USDC. ZachXBT noted that other affected wallets could be restored in the short term.
The partial reversal triggered a wave of criticism toward Circle over the lack of transparency regarding the legal basis of the freeze. At least one of the affected entities indicated that the action was linked to a sealed civil case in the United States, without any public justification being offered. Following an independent review of on-chain activity, ZachXBT found no signs of illicit behavior in the frozen wallets. “In my five-plus years of investigations, this might be the most incompetent freeze I’ve ever seen,” he posted on his social media.
Circle unfroze the USDC for the Goated hot wallet a few minutes ago.
I expect more hot wallets to be unfrozen soon.
The crypto community needs answers from @jerallaire @circle about why this overreach ever occurred to begin with. pic.twitter.com/Hscp0RAoMY
— ZachXBT (@zachxbt) March 26, 2026
Taylor Monahan, a security researcher at MetaMask, noted that Circle’s process has historically delegated freeze decisions to judicial authorization, without conducting independent technical verification. Several market analysts agreed that unfreezing a single wallet does not resolve the underlying conflict: the problem is disrupting legitimate operations when acting without solid evidence.
Source: https://x.com/zachxbt/status/2036963733164241027
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