On-chain analyst ZachXBT has raised concerns about compliance issues surrounding Circle, the issuer of the USDC stablecoin. His accusations focus on the utilization of USDC for illicit transactions, questioning the company's reputation.
Accusations of USDC Use by North Korean Hackers
ZachXBT stated that North Korean IT workers are using USDC to move millions of dollars in illicit payments. This claim comes in light of Circle's recent application for a national trust bank charter to manage the reserves backing USD Coin.
Critique of Circle's Response to Allegations
ZachXBT criticized Circle for not taking action against known illicit activities. He asserts that despite the scale of the fund flows, the company has not made efforts to freeze any involved wallets. "They currently do nothing to detect/freeze the activity", the analyst pointed out.
Context and Reputational Consequences for Circle
This behavior by Circle stands in stark contrast to actions taken by other issuers like Tether, which freeze suspicious wallets in similar cases. Circle has yet to publicly address the allegations, which could negatively impact its reputation as a compliance leader.
ZachXBT's statements draw attention to potential compliance issues within Circle and may affect user and investor trust in the company. It is crucial for Circle to ensure transparency in its actions and responses against illicit transactions.
