Circle Freezes 16 USDC Wallets Linked to Ongoing US Civil Case

Stablecoin issuer Circle has frozen USDC balances across 16 hot wallets tied to multiple crypto businesses. The action took place on March 23, 2026, and relates to an ongoing U.S. civil case with undisclosed details.

The affected wallets belong to a mix of exchanges, online casinos, and forex service providers, which appear to operate independently with no clear links to one another.

ZachXBT Questions Circle’s Freeze Decision

On-chain investigator ZachXBT first reported the development through his Investigations channel. He confirmed that one impacted business attributed the freeze to a U.S. civil matter but shared no further information.

After reviewing transaction histories, ZachXBT stated that the wallets showed normal operational activity. He added that basic analysis could identify them as active business wallets handling high transaction volumes.

Despite this, he questioned why the request behind the freeze was not thoroughly reviewed before execution. He also argued that multiple parties, including legal and forensic actors, may have contributed to the outcome.

In a follow-up post on X, ZachXBT reiterated these concerns. The on-chain sleuth said the decision process appeared inconsistent with how similar incidents are typically handled.

Circle Wallet Freezes and Their Impact

Circle has not released a public statement explaining the freezes or the legal basis for the action. The civil case tied to the request remains sealed, limiting external verification of the claims.

The incident adds to ongoing debates around centralized stablecoins and issuer control over user funds. While such controls aid regulatory compliance, critics warn they can disrupt legitimate operations, highlighting tension between oversight and business continuity.

Businesses that depend on USDC for payments and liquidity now face operational disruption. The lack of prior notice and limited transparency has raised concerns about counterparty risk within the stablecoin system. This has made companies wary of sudden freezes.

This is not the first time Circle has frozen wallets under such circumstances. In May 2025, the company froze two wallet accounts linked to the Libra memecoin scandal, containing about $57.6 million in USDC.

According to data from Arkham, one frozen Libra wallet contained $44.59 million in USDC. Another deployer wallet for Libra held around $13 million worth of USDC.

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