- Circle CEO Jeremy Allaire said the company does not freeze USDC wallets unless the action is tied to legal proceedings.
- He also said Circle is discussing a possible safe harbor in US law that could allow preventive action in extreme cases.
Circle chief executive Jeremy Allaire has drawn a firm line around when the company will, and will not, freeze USDC wallets.
Speaking at a press conference in Seoul on Monday, Allaire said Circle does not block wallets simply because public pressure builds online after a hack or exploit. According to him, the company acts only when directed by law enforcement or the courts, even when the funds involved are widely believed to be tied to theft.
Circle says legal authority, not public pressure, guides wallet freezes
The remarks come as criticism has mounted over Circle’s handling of stolen funds in recent crypto exploits. That scrutiny intensified after the roughly $280 million Drift exploit earlier this month, an attack reportedly linked to a long-running social engineering operation likely carried out by North Korean actors.
Allaire’s response was direct. Circle, he said, has a “very, very clear performance obligation under the law,” and the company follows the rule of law rather than making discretionary judgments on its own. He argued that giving a private company the power to decide, case by case, which wallets should be frozen would create a serious moral and legal problem.
That position may frustrate some users, especially in crypto, where speed often matters more than process once funds begin moving. Still, Circle is clearly trying to present itself less as an ad hoc enforcer and more as a regulated financial actor operating inside defined legal boundaries.
A future safe harbor could change the equation
At the same time, Allaire suggested the current framework may not be sufficient forever. He said Circle has been working with US authorities involved in shaping the CLARITY Act and has discussed the need for a specific legal safe harbor that would allow issuers such as Circle to take preventive action in extreme situations.
That is an important caveat. Circle is not saying it never wants the ability to intervene earlier. It is saying that power needs to be explicitly granted by law, rather than assumed by the company itself.
For now, the message is fairly plain. If users want Circle to freeze wallets preemptively after hacks, the company believes that authority needs to come from legislation, not from pressure on X.
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