ZachXBT Alleges Circle Failed to Monitor $420M in Suspicious USDC Activity

On-chain investigator ZachXBT has formalized allegations in the 'Circle Files' report, documenting $420 million in suspicious USDC activity since 2022. The report specifies that this total figure is linked to 15 distinct cases of suspicious activity identified across the blockchain. In a new update, ZachXBT specified that Circle froze 16 legitimate wallets while failing to intercept stolen assets in the documented cases. New scrutiny continues to question the response speed of Circle's compliance team, especially after its proprietary bridge was identified as a conduit for $230 million in stolen funds. The $280 million Drift Protocol exploit remains a primary example where Circle allegedly failed to intervene despite having sufficient time. These developments emerge under the stricter oversight of the CLARITY Act, potentially damaging USDC's standing with regulators and impacting liquidity across the ETH and SOL ecosystems.