Circle unfreezes one wallet after controversial USDC freeze

Circle has reversed part of its recent USDC enforcement action after one of the 16 frozen wallets regained access to funds. 

The move has shifted attention from the initial freeze to Circle’s review process, as public questions continue over how the company handled the case.

On-chain investigator ZachXBT said Circle unfroze the wallet address “0x61f…e543,” which he linked to Goated.com. Data cited in current reporting showed the wallet held about 130,966 USDC after access was restored.

ZachXBT also said other affected wallets could be restored soon. That update followed Circle’s earlier action against 16 wallets tied to separate business operations, including exchanges, casinos, and foreign exchange platforms.

Earlier reports said the freeze was linked to a sealed US civil case. At the same time, public reporting said the targeted wallets appeared to belong to unrelated businesses, with no clear public explanation for why all 16 were included in one action.

ZachXBT criticized the decision in strong terms. He wrote,

“In my 5-plus years of investigations, it could potentially be the single most incompetent freeze I have seen.” 

He also said Circle had “zero basis” to freeze the funds tied to the case.

In addition, the partial unfreeze has kept the wider debate alive around how centralized stablecoin issuers handle enforcement. Market observers said restoring one wallet does not fully answer the questions raised by the earlier blacklisting.

MetaMask security researcher Taylor Monahan also called for stronger investigative standards and accountability when issuers freeze user funds. Current reporting said she pointed to the need for clearer review procedures when court-backed actions affect active business wallets.

The case has renewed attention on the powers built into centralized stablecoins such as USDC. Public reporting noted that Circle can block addresses, a feature supporters link to compliance needs and critics link to control over user funds.