Recent criticism from blockchain investigator ZachXBT targeted Circle, the issuer of the USDC stablecoin, regarding their slow response in blacklisting addresses associated with the North Korean Lazarus Group.
Criticism of Circle's Actions
Circle released a statement emphasizing the need for collaboration with government authorities to create a secure financial system. However, ZachXBT highlighted that Circle was slow to block addresses linked to illegal activity, contrasting with other major stablecoin issuers that responded quickly. He pointed out that Circle fought government orders to freeze Lazarus Group addresses for six months.
CITE_W_A: "You’ve got to work with governments. There’s no way around it."
The Garantex Situation
ZachXBT also referred to the OFAC-sanctioned platform Garantex, which was shut down by the U.S. Department of Justice in March 2025. Garantex allegedly funded ransomware groups and engaged in drug trafficking. The platform processed billions in cryptocurrency for criminal organizations and had ties to cyber gangs such as the Lazarus Group.
General Consequences of Delays
The delays in blacklisting addresses associated with the Lazarus Group have raised concerns about the speed at which major stablecoin issuers respond to illegal activity. While other platforms have already blacklisted millions of dollars, some USDC addresses remain active, highlighting challenges in ensuring security within the cryptocurrency environment.
ZachXBT's criticism raises important questions about the need for prompt action by stablecoin issuers against cyber threats and illustrates the risks faced by companies operating in the cryptocurrency space.
