TLDR
- Jeremy Allaire said sanctioned regimes are unlikely to use USDC for Hormuz tolls.
- Circle said it does not freeze USDC wallets outside legal proceedings.
- Drift lost up to $280 million in an attack linked to suspected North Korean actors.
- Critics said Circle did not freeze $230 million in USDC moved after the Drift exploit.
Circle CEO Jeremy Allaire said USDC is unlikely to be used for crypto tolls at the Strait of Hormuz. He said sanctioned actors avoid assets that can be frozen quickly. He made the remarks during a press conference in Seoul, South Korea, on Monday.
At the same event, Allaire addressed criticism over Circle’s response to hacked funds. He said the company does not freeze USDC wallets unrelated to legal proceedings. His comments came after fresh backlash tied to the Drift exploit earlier this month.
Circle Says USDC is unlikely to be Used for Hormuz Tolls
Allaire was asked whether Iran’s Revolutionary Guards might accept USDC for passage fees at the Strait of Hormuz. He said that scenario was unlikely. He pointed to Circle’s compliance systems and close work with authorities.
He said sanctioned regimes usually avoid assets that can be frozen with speed. He also referred to public research from the United Nations and blockchain forensic firms. According to Allaire, that data shows sanctioned actors tend to use other stablecoins.
Allaire said, ”It’s highly unlikely that a regime under sanctions would attempt something where the likelihood of the assets being immediately frozen is extremely high.” His remarks aimed to frame USDC as a poor option for actors facing sanctions. That message also matched Circle’s broader compliance position.
The comments came as geopolitical risks around global shipping and payment routes remain in focus. Even so, Allaire said USDC would not be the preferred token in such a case. He tied that view to Circle’s ability to cooperate with enforcement requests.
Circle Answers Criticism Over the Drift Exploit Response
Allaire also responded to online criticism of Circle’s action, or inaction, in freezing USDC linked to hacks and exploits. He said Circle does not freeze wallets that are unrelated to legal proceedings. That point was central to his answer in Seoul.
The criticism grew louder after DeFi protocol Drift was exploited earlier this month. The attack caused losses of up to $280 million. Reports linked the exploit to a sophisticated six-month social engineering scheme likely carried out by North Korean actors.
Prominent onchain voices, including blockchain sleuth ZachXBT, strongly criticized Circle after the attack. They said the company should have frozen the reported $230 million in USDC tied to Drift. Those funds were moved from Solana to Ethereum through Circle’s Cross-Chain Transfer Protocol.
Allaire said Circle can only freeze wallets when it receives direction from courts or law enforcement. He said the company does not decide such matters on its own. That position, he argued, reflects legal boundaries rather than a refusal to cooperate.
Circle Says Legal Process Must Guide Wallet Freezes
Allaire said, ”We do not as a company decide what is the right path.” He added that taking such action without legal basis creates a ”very significant moral quandary.” Those remarks addressed calls for Circle to act faster in cases involving stolen funds.
His comments showed how Circle views its role in enforcement matters. The company says it can respond to legal orders, but not act as judge. That legal standard remains at the center of debate after the Drift case.
Allaire also said Circle wants the CLARITY Act to include a safe harbor for emergency freezes. That would allow issuers to act before formal orders arrive in rare cases. He said such power should come from law, not company discretion.
He said, ”We need that to be in the law, not just what we decide on our own.” That statement linked Circle’s current limits to its policy goals. It also showed that the company wants clearer rules for urgent cases.
Seoul Remarks Tie Compliance To Circle’s Wider Policy Push
Allaire’s Seoul appearance came during a visit focused on meetings with exchanges, banks, and regulators. The event gave him a chance to address both policy and market concerns. He used the occasion to defend Circle’s compliance model.
He also commented on stablecoin legislation and industry rules. Still, the main focus remained on sanctions, wallet freezes, and the Drift exploit. Those topics now sit at the center of Circle’s public messaging.
By linking sanctions risk with Circle’s freeze controls, Allaire argued that USDC is not a likely choice for crypto tolls at the Strait of Hormuz. At the same time, he made clear that Circle will not freeze wallets outside legal proceedings. That stance is now shaping the company’s response to criticism after Drift.
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