Circle’s ‘compliant’ USDC is the go-to for DPRK hackers: ZachXBT
On-chain investigator ZachXBT has raised concerns over USDC stablecoin issuer Circle’s compliance standards and its growing use among malicious actors.
According to ZachXBT, North Korean IT workers have been using USDC (USDC) to move millions in illicit payments. The on-chain analyst’s comments came in response to Circle’s recent filing for a national trust bank charter, which would authorize the firm to manage the reserves backing USD Coin.
ZachXBT criticized Circle’s handling of the situation, alleging that despite the scale and visibility of the fund flows, the company has taken no steps to curb the activity or freeze any of the wallets involved. “They currently do nothing to detect / freeze the activity while boasting about compliance,” he wrote.
The payments are tied to malicious North Korean cyber actors who land remote tech jobs under false identities, gaining access to unsuspecting organizations’ infrastructures. This is a tactic that has become widely flagged by security experts as one of the group’s latest methods for stealing funds and information.
ZachXBT claimed to have identified high eight-figure volumes flowing through these wallets recently, most of it in USDC.
For years, Circle’s rival Tether’s USDT (USDT) drew the most criticism for enabling illicit transactions due to its perceived lack of oversight. In contrast, Circle was viewed as the industry’s compliance leader, boasting licenses from major regulators and pushing a cleaner image.
Earlier this year, the firm went public under the same compliance narrative and earned praise for setting a positive regulatory precedent within the industry. Circle’s reported failure to take action also contrasts sharply with how Tether and other stablecoin issuers have responded in similar cases, freezing wallets and blocking suspicious fund movements.
While the issuer has yet to publicly deny or acknowledge the allegations, the reports of allowing sanctioned actors to operate unchecked deal a major blow to its reputation.
crypto.news reached out to Circle for comment but has yet to receive a response as of press time.
