Jeremy Allaire, CEO of Circle, recently posted on X (formerly known as Twitter), appreciating USDC as “the most transparent, liquid, and safe digital dollar.” While the statement was made to showcase USDC’s strengths, it quickly drew attention of ZachXBT, well-known blockchain investigator, who then raised questions about Circle’s role in handling crypto hacks.
ZachXBT Questions Circle’s Response to Hacks
ZachXBT replied to Allaire’s post stating “Why does Circle always deny helping victims in large exploits/hacks in clear cut cases of illicit funds as a centralized issuer? Is your incident response team nonexistent?”
Why does Circle always deny helping victims in large exploits/hacks in clear cut cases of illicit funds as a centralized issuer?
Is your incident response team nonexistent?
— ZachXBT (@zachxbt) December 11, 2024
This comment brings community’s concerns about Circle’s lack of action when illegal funds are identified. As the issuer of USDC, Circle has the capability to freeze funds in certain circumstances, yet the company has never taken such action in some clear and significant cases, leaving victims without support.
Transparency vs. Accountability
Since Circle is the centralized issuer of the USDC, ZachXBT’s criticism adds to a broader debate about the responsibility of the issuer. Even though transparency is important in such cases but so is accountability. Transparency and accountability are needed for building trust within the crypto ecosystem.
This comment raises important questions whether centralized issuers like Circle should take more proactive stance in addressing exploits and hacks or prioritize the principle of decentralization.
Within the comments section of the X post, when one of the X users asked the investigator if Tether was any better than Circle, to which ZachXBT responded saying that Paxos, Tether, Techteryx are all more proactive than Circle.
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