TLDR
- Circle unfroze one of 16 blacklisted USDC wallets, according to ZachXBT.
- The restored wallet is tied to Goated.com and holds 130,966 USDC on Arkham data.
- ZachXBT said more affected wallets may be restored in the near future.
- The 16 frozen wallets were linked to exchanges, casinos, and forex platforms.
- The earlier freezes were tied to a sealed U.S. civil case, affected firms said.
Circle has restored access to one of the 16 USDC wallets it blacklisted earlier this week, according to ZachXBT. The move came after criticism spread across the crypto market and raised new questions about issuer control over stablecoins.
The wallet, identified as “0x61f…e543,” is linked to Goated.com, ZachXBT said in a Wednesday post on X. Arkham data showed the wallet held 130,966 USDC after access returned. ZachXBT also said more affected wallets may be restored “in the near future.”
One wallet restored after broad freeze drew public criticism
The restored wallet was part of a wider action that affected 16 hot wallets used by businesses. ZachXBT had earlier said the wallets appeared to belong to exchanges, casinos, and forex platforms. He also said there was no clear onchain link between them.
The earlier freeze disrupted operations at several firms, according to people cited in reports. Some affected parties said the action was tied to a sealed U.S. civil case. However, the case details were not made public, and that left businesses without a clear reason for the freeze.
ZachXBT strongly criticized the action after the blacklist became public. “The NY civil case is sealed and they have provided absolutely ZERO basis to freeze all of these business addresses,” he wrote on Wednesday. He added that, in his view, the freeze process lacked a proper review standard.
Circle had not publicly explained the legal basis for the full set of wallet restrictions at the time of reporting. The company also had not confirmed when the remaining wallets might regain access. That uncertainty kept attention on how stablecoin issuers use blacklist controls.
Freeze powers remain central to the stablecoin debate
USDC includes blacklist and token wipe functions in its smart contracts. These features allow Circle to block or remove funds when legal or compliance action is required. Supporters say these tools help respond to theft, sanctions issues, and illicit finance cases.
Critics say such powers can affect lawful users when actions are broad and details stay sealed. The freeze of 16 business wallets renewed that concern because the entities appeared unrelated. The lack of public explanation also added pressure from market participants and security researchers.
The episode came only weeks after ZachXBT accused Circle of slow action in another case. He said Circle did not move fast enough to freeze more than $3 million in stolen USDC linked to SwapNet users. He compared Circle’s response with rival issuers and said enforcement appeared uneven.
Stablecoin controls face closer scrutiny as adoption grows
The debate over freeze activity often includes comparisons between Circle and Tether. Data cited by Moneycheck said Tether has frozen about $1.6 billion in USDT across more than 2,500 addresses. The same data said Circle has frozen about $110 million in USDC across fewer than 500 addresses.
Those figures are often used in arguments over speed, scope, and consistency in enforcement. They also matter more as tokenized dollars gain wider use across trading, payments, and institutional settlement. As USDC expands across large platforms, each freeze action receives closer attention.
The unfreezing of one wallet may ease some concern for now, but questions remain around the 15 others. ZachXBT said more restorations could come soon, yet no wider resolution had been confirmed. Until then, the case keeps focus on how centralized stablecoins balance compliance and user access.
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