- Circle says USDC freezes happen only under legal orders and not by choice.
- ZachXBT criticizes Circle for its slow response during the Drift Protocol exploit.
- Drift Protocol exploit reignites debate on accountability in crypto.
Circle released a detailed blog post today, April 10, 2026, on social media platform X, following the massive exploit on Drift Protocol. With this blog, the organization was trying to explain its role when things go wrong in crypto. Soon after, ZachXBT, a well-known blockchain sleuth, stepped in with a sharp response and questioned whether Circle is really doing enough or not.
What Happened with Drift Protocol?
On April 1, Drift Protocol, built on Solana-network, was hit by a major exploit. Hackers managed to drain more than $270 million by taking advantage of smart contract vulnerability.
Like most DeFi hacks, the funds did not just sit in one place. They were quickly shuffled across wallets, bridges and other tools and all of this made it difficult to track or recover them.
This kind of attack highlights a recurring issue in crypto, where everything moves incredibly fast, and once the funds are gone, there is usually very little room for delay or error.
Circle Says Freezes Are About Law, Not Control
In the blog that was posted today, Circle focused on the fact that the company can freeze USDC funds only when it is legally required. The company explained that it cannot and does not randomly block wallets or step in on its own, but in fact it has to wait for official instructions from regulators or law enforcement agencies in places like the US and Europe. So basically, Circle is not acting as a judge but is simply following the law.
Recent events are a reminder that trust in digital assets depends on security, accountability, and the rule of law across the ecosystem.
Circle is a regulated company that complies with sanctions, law enforcement orders, and court-mandated requirements. We freeze assets when… pic.twitter.com/zG0FZzCd1n
— Circle (@circle) April 10, 2026
At the same time, the company has also warned against overreacting to incidents like this. It argued that adding too many restrictions too quickly could harm innovation and make decentralized systems less open.
Circle also suggested improving safety across the ecosystem, such as adding emergency mechanisms or “circuit breakers” to reduce damage during major hacks.
ZachXBT Pushes Back Hard
However, the blockchain sleuth did not agree with the given explanation. He pointed out that in many real-world cases, especially those linked to the Lazarus Group, there was enough time to act before funds disappeared completely, but no immediate action was taken.
Circle has resulted in $240M+ directly funding North Korea across multiple hacks when you had hours to act for a clear cut case.
How is that compliance for USDC?
Stop acting as if you represent permission-less values you are a centralized stablecoin issuer and publicly traded… pic.twitter.com/D6a0N1Ms0h
— ZachXBT (@zachxbt) April 10, 2026
His argument is straightforward: if Circle has the power to freeze funds, then why wait for legal orders when the situation is clearly a hack?
He also called out what he sees as inconsistency. In some cases involving US legal action, Circle reportedly responded quickly. But in other major hacks, the response was slower.
To him, this raises a bigger concern, whether the system is being applied equally in all situations.
The Real Issue: Speed vs Decentralization
This back-and-forth highlights a deeper problem in crypto. On one hand, crypto is built on decentralization. The whole idea is that no single entity controls the system. The users have full ownerships of their funds. On the other hand, hacks happen in minutes. By the time legal approvals come through, the money is already gone.
That creates a tough balance. Acting too quickly can make companies look overly powerful and centralized. Acting too slowly can leave users unprotected.
What This Means for the Future
The Drift Protocol exploit is more than just another hack, it is a reminder that crypto is still figuring itself out. As governments work on new rules around stablecoins and digital assets, companies like Circle will face more and more pressure to respond faster while still staying compliant.
At the same time, voices like ZachXBT are pushing the industry to be more proactive and accountable. For everyday users, this debate matters. It affects how safe your funds are and how much control different players in the system actually have.
Right now, there is no clear answer. But one thing is clear that these conversations are shaping what the future of crypto will look like.
Also Read: Circle Announces Quantum-Resistant Upgrade Plan for Arc Blockchain
