Whale.io and more USDC wallets frozen by Circle?

[mikel_012]

ZachXBT posted this big news in the telegram channel Investigations by ZachXBT

BREAKING: Circle froze the USDC balance of 16 hot wallets for various businesses late yesterday.

I spoke with one of the affected businesses directly and they stated it was due to an ongoing US civil case whose details are not yet disclosed.

I reviewed the onchain activity and the exchanges, casinos, forex businesses do not appear to be related at all to each other.

Why was the request not properly reviewed by Circle?

For those unfamiliar a crypto business has a hot wallet to process the bulk of transactions for its users.

An analyst with basic tools could have identified within minutes that these were operational business wallets from the thousands of transactions they process.

Now their business operations have been negatively impacted by Circle, Lawyer, Forensics firm, & Judge

Rain[.]gg
0x87d18ee84e8f4f5709cbf3500179a4c601da12ce
Clash[.]gg
0x9e2a58d257963a276452fff1be94c0eb7e2775cc
Whale[.]io
0x4bd282c083d9ec35aa6c3e0f366d79f12f3a1630
Goated[.]com
0x61f08d119974a3d9915f06765d83fe1aa677e543
500 Casino
0x68416debc20d13e5ef694cdcac9506f4c1a20184
Pepperstone
0x258494a21d9ea90fcbcb9e22bd57c6899de0d995
FXPro
0x5f9acf4e85aa7283e0c16dd94cbc942f9d625151
AMarkets
0x22face80f43b857141e9752c3bae8c3309fcdd0f
Herofx
0x2704ba2d5d3544e6292d9aca536b6bbbfebd80e9
Unknown service hot wallets
0xfb3a175ce3cb33d9f464a3c5ea0b834dae2aaaf6
0xb25ea1d493b49a1ded42ac5b1208cc618f9a9b80
0x090aac31fca0d19f91e30e02ec8217098a3a4446
0xbfca3e2097baa1eb354e9d915180707dde1027f2
0x3b848ac300b9e0d260e812b628b87a03d278db95
0x00e84a0b678cd4584a9a377d334c810025970873
0xf9e83020cccbd1a95f0f257a5a9e3d58149762f8

Source: https://t.me/investigations/304

It caught my attention because Whale.io is mentioned along other casinos and we know them because of all the support and activity they have in this forum.

This shows that USDC can not be trusted because they can freeze wallets without giving enough reasons and this can impact the situation of many services or people.

What do you think about this?

[virasog]

This shows that USDC can not be trusted because they can freeze wallets without giving enough reasons and this can impact the situation of many services or people.

Is this the reason we saw a big dump in the Circle stock which is the issuer of this USDC stablecoin  I think this will make people lose trust in UDSC, and we may see people moving to USDT, although Tether also has the ability to freeze any wallets. Due to this reason, it's really risky to store our stable coins in USDC/USDT, but we don't have much other options.

[OmegaStarScream]

Is this the reason we saw a big dump in the Circle stock which is the issuer of this USDC stablecoin  I think this will make people lose trust in UDSC, and we may see people moving to USDT, although Tether also has the ability to freeze any wallets. Due to this reason, it's really risky to store our stable coins in USDC/USDT, but we don't have much other options.

I highly doubt it. As far as the shareholders are concerned, Circle is just doing what any other stablecoin issuer usually does whenever there is anything suspicious or when asked by the goverment.

The stock crashing probably have something to do with the clarity act news:

https://www.coindesk.com/policy/2026/03/23/stablecoin-yield-in-crypto-clarity-act-won-t-allow-rewards-on-balances-latest-text-says

[mikel_012]

This shows that USDC can not be trusted because they can freeze wallets without giving enough reasons and this can impact the situation of many services or people.

Is this the reason we saw a big dump in the Circle stock which is the issuer of this USDC stablecoin  I think this will make people lose trust in UDSC, and we may see people moving to USDT, although Tether also has the ability to freeze any wallets. Due to this reason, it's really risky to store our stable coins in USDC/USDT, but we don't have much other options.

It can also be related to rules in the USA not allowing Circle to offer yield to USDC holders so this can decrease the demand for the stablecoin

Or it can also be because of Tether that is going to get a full audit and this can stop the growth of USDC in more regulated markets like the USA, since competition is higher with USDT

I don't think this freezing has anything to do with the crash, it's very recent news from ZachXBT

[logfiles]

Why are most of us not surprised? 

This will always continue to happen as long as people keep on heavily relying on those centralized stablecoins for transactions. Stablecoins and fiat currencies are not so much different (except that at least cash once in your pocket can not be frozen). Maybe people will start remembering the true purpose of Bitcoin yet again

[FinneysTrueVision]

It doesn’t seem like Whale.io was doing anything wrong, but just one customer doing something illegal can be enough to have their funds frozen. Thankfully, the impact is only limited to 100k USDC. I would assume that a casino that is fairly well known would still have enough funds to continue operating with minimal disruption.

It would be too hard to change the preferences of gamblers on their casino, so for better or worse, they have to keep accepting centralized stablecoins if they don’t want to give up on those profits. Whatever approach they might take to minimize the possibility of freezing, they are always going to be limited by the design of USDT/USDC and the Ethereum blockchain, which has terrible privacy.

[Darker45]

This shows that USDC can not be trusted because they can freeze wallets without giving enough reasons and this can impact the situation of many services or people.

What do you think about this?

To be fair, is this something Circle voluntarily and unilaterally decided to do? Is this their sole initiative or are they just following powerful orders coming from up there? Are we not jumping the gun on Circle when it's possible they're just bullied to comply and are actually as clueless as us what this undisclosed civil case is all about?

Well, this is the price to pay for banking on compliance to make a name. Of course, Circle is partly to blame. In their desire to look good to the regulators, they're creating a bad public image.

[hugeblack]

I thought they were personal accounts, but they are corporate accounts, so there's nothing surprising about this news. The deposit addresses themselves aren't the problem for users; the real issue is the freezing of addresses that have received payments from those addresses. Using stablecoins remains extremely risky for businesses and institutions, and risky for individuals.

[salad daging]

It doesn’t seem like Whale.io was doing anything wrong, but just one customer doing something illegal can be enough to have their funds frozen. Thankfully, the impact is only limited to 100k USDC. I would assume that a casino that is fairly well known would still have enough funds to continue operating with minimal disruption.

I don't know if there is one customer who did illegal actions against Whale.io wallets, but based on what I read the conversation on X that the USDC freezing case is due to a civil claim which I myself don't know what this civil case is so it concerns several business wallets.

It would be too hard to change the preferences of gamblers on their casino, so for better or worse, they have to keep accepting centralized stablecoins if they don’t want to give up on those profits. Whatever approach they might take to minimize the possibility of freezing, they are always going to be limited by the design of USDT/USDC and the Ethereum blockchain, which has terrible privacy.

It's impossible for casinos to refuse to accept stablecoin deposits because a larger portion of users use stablecoin currencies, maybe only one wallet is frozen this does not affect USDC deposits on whale.io right?


Some people satirize the Circle through memes.

[SeriouslyGiveaway]

Stablecoins frozen in wallets, it is not new.

Circle is not the only, the first stablecoin company froze stablecoins of their users, and won't be the last.

PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets.
Can stablecoins be frozen by issuers?
Stablecoins and blacklists.

[Z-tight]

This just brings to the fore the risks involved when you hold stablecoins, at least for those who do not know. I know services like these must hold stablecoins in their hot wallets, but i am talking about regular users who really have not reason holding stablecoins for a long time. Even if it doesn't get frozen in your own wallet, there is also the risk that not every stablecoin is actually backed 1:1, and even if it is unlikely, there is a potential risk of collapse.

[examplens]

Is this the reason we saw a big dump in the Circle stock which is the issuer of this USDC stablecoin  I think this will make people lose trust in UDSC, and we may see people moving to USDT, although Tether also has the ability to freeze any wallets. Due to this reason, it's really risky to store our stable coins in USDC/USDT, but we don't have much other options.

USDC became "more popular" after Tether decided not to comply with MiCA rules in the EU. Users from the EU will not return to USDT, although the MiCA regulation is not strictly enforced. At the same time, it does not matter whether it is Circle or tether if there is a risk of funds being blocked.
And yes, there is an alternative without this risk, which is DAI.

[icopress]

Whale confirmed this but stated that this had no impact on gameplay or financial functions. Deposits and withdrawals are operating as usual, without any delays.

[Rikafip]

USDC became "more popular" after Tether decided not to comply with MiCA rules in the EU. Users from the EU will not return to USDT, although the MiCA regulation is not strictly enforced.

As someone living in EU I can attest to that. USDC indeed became more popular here in Croatia as majority of exchanges stopped using USDT, but there is at least one that still buys/sells USDC, meaning it is not stricly enforced. At least not yet.

Regarding the news, we all know the risks (or at least we should know) of using stablecoins, but people always think it won't happen to them. Until it does.