Circle CEO says he won’t freeze USDC without a court order even as hackers walk

[Oshosondy]

Critics have against USDC that it is not freezing coins that is linked to hack and others fast but delayed and that some are not freezed at all.

You can read about it on this news: https://www.coindesk.com/business/2026/04/13/circle-ceo-says-he-won-t-freeze-usdc-without-a-court-order-even-as-hackers-walk-away-with-millions

Circle Internet (CRCL) CEO Jeremy Allaire makes it clear that they only freezed  that court tell them to freeze.

This can tell you more about the news:
Allaire framed USDC as part of the traditional financial system, subject to legal process and oversight. Decisions to blacklist or freeze funds, he suggested, should not be made at the discretion of the company in the heat of an exploit, but instead follow requests from law enforcement or court orders. The approach reflects Circle’s broader strategy to align closely with regulators and institutions.

Rival Tether, the issuer of the world's largest stablecoin, USDT, has a more proactive approach. The company has repeatedly frozen funds linked to hack and illicit activity within hours. In several cases cited by blockchain sleuth ZachXBT, including exploits affecting Ledger and Remitano, Tether blacklisted stolen funds while equivalent USDC remained untouched.

What do you think about this? I am directing this to people that are afraid that their stable coins can be frozen on noncustodial wallet.

[FinneysTrueVision]

I really don’t know what is the point of centralized stablecoins if they are going to say they don’t have to do anything to protect users’ funds unless a court asks them too. And in some cases, like with Whale.io, they froze the funds of a business that hadn’t done anything wrong. The courts are very incompetent and Circle is using this as a cover for their own negligence. The Drift hack was a clear cut case of people’s money being stolen. For many hours Circle had the ability to do something about it and chose to let the thieves get away. We would all be better off not ever having to trust Circle or anybody else, however, decentralized stablecoins cannot scale so easily and therefore have been losing traction.

[BattleDog]

Regarding Circle waiting for court orders, I can at least respect the consistency even if it is painful in hack cases.

The alternative is letting a private company play instant global sheriff every time Twitter starts screaming. That can save money in some cases, sure, but it can also go sideways fast and freeze the wrong people. Tether tends to move faster, Circle wants a thicker stack of paper before it acts. Pick your poison. If someone is afraid their stablecoins can be frozen, the honest answer is yes, they can. That is part of the package with USDC. If you want something censorship resistant, you do not get it from a corporate IOU wearing a blockchain hat.

[JeromeTash]

I really don’t know what is the point of centralized stablecoins if they are going to say they don’t have to do anything to protect users’ funds unless a court asks them too.

But this has been the standard even when it comes to centralised exchanges. If someone steals your money and sends it to an exchange address that you can identify. Once you write to them asking them to block the account or reveal the person behind it, they will simply tell you to first process a court order.

You don't want your funds getting frozen "proactively" just because someone said so, yet you were not involved in any hack.

[passwordnow]

Even there is no court order if the address has received funds from hacked wallets and addresses, they need to act on it. They know it that for every rule there is an exception and they have all the means on their own platform to do so so that the hackers won't have a good meal with someone else's hard earned money. So hoping that they'll have some actions towards these hacked funds won't be usually successful as it will take time for a court order to come out and it will only happen if someone files for that.

[FinneysTrueVision]

But this has been the standard even when it comes to centralised exchanges. If someone steals your money and sends it to an exchange address that you can identify. Once you write to them asking them to block the account or reveal the person behind it, they will simply tell you to first process a court order.

You don't want your funds getting frozen "proactively" just because someone said so, yet you were not involved in any hack.

I can understand the restraint when the theft happens to a random individual, and there should be a higher burden in that situation to avoid frivolous complaints wasting their resources. An exchange being hacked for hundreds of millions of dollars is very different and almost any reputable CEX would take action as soon as they became aware of the situation, not waiting until there was a legal order.

Circle’s critics aren’t even arguing that they should proactively freeze coins. They are a regulated financial institution, based in the United States, and the expectation is that they should not allow criminals acts to happen so brazenly right under their noses. For some reason these rules are applied to non-custodial wallet developers, but not to centralized stablecoin issuers who can afford to spend millions of dollars influencing the right people in Washington.

[hugeblack]

It starts like this, with strict conditions at the beginning, but as long as there is the possibility of "freezing coins," there is no guarantee that they will not be misused without court permission.

[sergiorus]

honestly this is ridiculous. as a centralised and regulated stablecoin issuer their main purpose is to be able to freeze funds in case of hacks - otherwise this multi billion dollar DeFi economy just wouldn't exist.
there are plenty of decentralised stablecoins for those who want anarchy but the market needs secure options.

[MAAManda]

While some people view that statement as a negative one, I view it as a positive one. That's good IMO because even though they're an entity with a centralized project, they want the system to run like a decentralized one. That statement strengthens the belief of stablecoin adopters that $USDC is better than $USDT in terms of decentralization, even though both are the same.

[Odohu]

It is a very delicate issue that places the company in a tight corner. Some might see it as an easy thing to do but it you cannot be solving a problem by creating more problem in the future. They can face serious litigation in the future if they go on rampage freezing every coin that have questionable origin which is what I think the CEO is trying to avoid.

We have also learnt one thing in this which is the risk of holding funds in these coins that have an inbuilt freezing mechanism in their code.

[Ahli38]

It starts like this, with strict conditions at the beginning, but as long as there is the possibility of "freezing coins," there is no guarantee that they will not be misused without court permission.

That’s the real problem. The potential for coins to be frozen remains a possibility even for innocent holders. And that will make people afraid to hold stablecoins, where it will leading them to reconsider holding them in large quantities or even to immediately convert their stablecoins into other assets that cannot be frozen. I personally think that the future of stablecoins like this is still in question regarding their sustainability in the coming periods as they will likely bring further issues. Perhaps the performance of stablecoins will decline over time if the same problems continue to occur as they are currently doing. It becomes a problem if the issue even more complicated is the difficulty in verifying the source of funds received through stablecoin transactions as they may originate from illegal sources.

[asriloni]

I see nothing to feel worry about. I'm still using USDC at this moment, and it's fine. The key is that if you're not involving in the shady activity. Why do the court need to frozen your stable coin? People are just too paranoid with it.

Billions volumes in transaction in USD and millions people use it. It's my reason people who scared of it can't accept the fact stable coin is getting even more massive.

Beside that Circle CEO pointed a sense reason. Court order has been a requirement to block someone's address. However, i do agree they must have also some early protection in order to protect their stable coin users.

Using court's order to block hacker's address may a very time consuming. So Circle must be pro-actively watching it and ban it temporary in order to prevent the hacked funds got laundered.

[Odusko]

Even if there is no court order if the address has received funds from hacked wallets and addresses, they need to act on it. They know that for every rule, there is an exception, and they have all the means on their own platform to do so, so that the hackers won't have a good meal with someone else's hard-earned money. Hoping that they'll take some action towards these hacked funds won't usually be successful, as it will take time for a court order to be issued and it will only happen if someone files for it.

Following standard procedures by requesting Court order is the most appropriate step for every centralized institution although some of them tend to act outside of that standard procedures by acting fast and in the end the results is not often in the negative, even banks don't block accounts like that even if the account is found to have received funds for scammer hack into another person account, all their can do I to block your account, but need a court order block the recipient account, circle stands on court order before USDC freezing is just following legal procedures.

[passwordnow]

Even if there is no court order if the address has received funds from hacked wallets and addresses, they need to act on it. They know that for every rule, there is an exception, and they have all the means on their own platform to do so, so that the hackers won't have a good meal with someone else's hard-earned money. Hoping that they'll take some action towards these hacked funds won't usually be successful, as it will take time for a court order to be issued and it will only happen if someone files for it.

Following standard procedures by requesting Court order is the most appropriate step for every centralized institution although some of them tend to act outside of that standard procedures by acting fast and in the end the results is not often in the negative, even banks don't block accounts like that even if the account is found to have received funds for scammer hack into another person account, all their can do I to block your account, but need a court order block the recipient account, circle stands on court order before USDC freezing is just following legal procedures.

If the others can do an instant delay or blockage or banning of the wallet, this is the choice they can do. Legally, they're right in it but the dirty money would probably have moved already before the court order is released which doesn't help the victims after all. As for the banks, AFAIK they have the power to put such transactions a flag if it's risky even without a court order.