The post Circle Unfreezes One Blacklisted Crypto Wallet Following Backlash appeared on BitcoinEthereumNews.com.

Circle, the issuer of USD Crypto Coin (USDC), has reversed the blacklisting of one wallet among sixteen addresses it froze late Monday, March 23, following sharp public criticism from on-chain investigators and industry advocacy groups who characterized the original action as overbroad and potentially damaging to unrelated businesses. The reversal came within days of the freeze, an unusually rapid turnaround for a stablecoin issuer whose compliance decisions typically track sealed legal proceedings that unfold over months. The episode exposes a structural tension that USDC holders — particularly those in decentralized finance (DeFi) protocols and institutional treasury positions — have long acknowledged but rarely confronted so directly: that contract-level blacklisting authority, exercised at issuer discretion, renders USDC a conditionally censorship-susceptible instrument. We suspect this reversal signals that Circle’s internal compliance review process is sensitive not only to legal mandates but also to the reputational cost of perceived overreach, a dynamic with implications for how the company calibrates future freeze decisions. EXPLORE: Delaware Moves to Regulate Stablecoins Under State Banking Framework Circle Crypto Blacklist Reversal: What the On-Chain Record Shows Circle’s compliance team froze sixteen USDC wallets late on March 23, 2026, in connection with what sources describe as a sealed U.S. civil case. The targeted addresses span exchanges, casinos, and foreign exchange platforms; on-chain analysis conducted by blockchain investigator ZachXBT found no apparent transactional links between them, raising immediate questions about the scope and precision of the legal request underlying the action. How come Circle froze the USDC balance of 16 unrelated hot wallets late yesterday for a civil case? A basic review of onchain activity makes it obvious they are operational wallets. You fail to protect users during actual incidents yet respond to a request riddled with errors… pic.twitter.com/lSPCnIA1xK — ZachXBT (@zachxbt) March 24, 2026 ZachXBT, posting on X, described…

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Filed under: News - @ March 26, 2026 2:22 pm