ZachXBT investigation report: Circle has repeatedly failed in compliance actions, with a total amount involved exceeding $420 million According to BlockBeats, on April 3rd, blockchain detective ZachXBT released an investigation report on Circle, stating that the company has had "poor compliance enforcement" issues in multiple incidents involving illegal funds since 2022, with a total amount involved exceeding $420 million. The report points out that Circle, as the issuer of USDC, has always been known for its regulated and compliant system. Its token contract also has the function of freezing and blacklisting addresses, and explicitly reserves the right to restrict suspicious accounts in the terms of service. However, in multiple major security incidents, these mechanisms have not been used in a timely and effective manner. The report highlights the Drift Protocol attack on April 1, 2026, which resulted in the theft of approximately $280 million in assets. The attackers used Circle's own cross chain bridge CCTP to transfer over $232 million in assets from Solana to Ethereum within 6 hours, but no assets were frozen during this period. Similar situations have also occurred in attacks such as SwapNet, Cetus Protocol, and Mango Markets. In some cases, even though law enforcement agencies and industry experts have issued freezing requests, Circle has not taken timely action, and even processed the assets after they have been transferred. In addition, the report also pointed out that in the investigation of money laundering involving the hacker group Lazarus Group, Circle has shown a significant lag in response compared to other stablecoin issuers such as Tether and Paxos. In some cases, freezing operations are delayed for several months. Similar delays have also occurred in Ledger supply chain attacks and GMX attacks, where USDC stayed at suspicious addresses for hours or even longer without being frozen. ZachXBT stated in the report that this disclosure does not negate the value of Circle's products or stablecoins themselves, but emphasizes that its compliance decisions have caused "real and significant losses" to the industry. He pointed out that in the past three years, due to multiple failed actions, the DeFi ecosystem has suffered a cumulative loss of nine figure dollars, and the $420 million is only a conservative estimate of public cases, and the actual scale may be higher.