TL;DR
- The law firm Gibbs Mura has sued Circle in a class-action lawsuit
- Circle is accused of failing to freeze an estimated $230–280 million in stolen USDC linked to the Drift Protocol hack
- Circle defends its “legal-first” policy, freezing funds only after a formal request from authorities
- The lawsuit highlights the fundamental difference between Circle and Tether in handling stolen stablecoins
Lawsuit After Massive Crypto Heist
The law firm Gibbs Mura has filed a class-action lawsuit against Circle, the issuer of the stablecoin USDC, according to The Block. At the heart of the case is the claim that Circle reacted too slowly — or not at all — after attackers drained an estimated $280 million from Drift Protocol.
The lawsuit alleges that Circle had the technical capacity to freeze the relevant USDC addresses but chose not to utilize this option. The result, according to the plaintiffs, is that a significant portion of the stolen funds successfully disappeared from the system.
Circle defends itself by stating that unilateral freezing of funds could undermine decentralized finance and individual property rights
Circle: No Action Without Legal Order
Circle has long operated under a strict “legal-first” approach. CEO Jeremy Allaire has previously made it clear that USDC should be treated as a regulated financial product, and that the company does not intervene with arbitrary freezing of funds during ongoing attacks. Freezing only occurs after an explicit request from police or courts.
The company acknowledges that it is technically possible to blacklist addresses directly in the underlying smart contract — which would have prevented further transfer of the relevant USDC funds. Nevertheless, Circle chose to await official formalities from authorities.
Critics, including renowned blockchain investigator ZachXBT, have long claimed that Circle's passive approach since 2022 has resulted in over $420 million in stolen funds escaping. These claims have not been legally settled.
Tether Does It Differently
The comparison with Tether is striking. While Circle waits for the authorities' green light, Tether has repeatedly frozen funds within hours of attacks becoming known. In 2025, the company notably helped freeze $23 million linked to the sanctioned Russian exchange Garantex, and approximately $225 million in connection with an international fraud case — both in close cooperation with US authorities.
Between 2023 and 2025, Tether blacklisted 7,268 addresses with a total of $3.29 billion in frozen funds. This is approximately 30 times more than Circle in the same period, measured in both address count and amount, according to available industry data.
What Class-Action Lawsuits Do to the Crypto Market
From a broader perspective, research shows that class-action lawsuits have a clear negative effect on investor sentiment in the crypto industry. It is worth noting, however, that the number of crypto-related securities lawsuits actually fell to eight in 2024 — down from 23 in 2022 — which coincided with a stronger market period. In the first half of 2025, however, filings increased significantly again.
From an investor perspective, this case puts Circle in a difficult bind: Either the company accepts that critics have a point and adjusts its policy, or it fights the case in court and risks long-term negative attention during a period when BTC is already trading near $74,600 with a Fear & Greed Index of only 21.
The case is not settled, and Circle has not yet publicly responded to the lawsuit with specific counterarguments. 24Krypto will continue to follow the case.
Source: The Block
