Stablecoin issuer Circle has unfrozen one of 16 wallets it targeted in a controversial enforcement action earlier this week. On-chain investigator ZachXBT revealed the restored wallet, linked to Goated.com, holds nearly $131,000 in USDC and suggested others may follow. The move has intensified criticism over a lack of transparency, with experts stating the freeze lacked clear justification and disrupted legitimate businesses.
Stablecoin issuer Circle has restored access to USDC funds in one of the 16 wallets it controversially froze this week. The unfrozen address, identified by on-chain investigator ZachXBT, is linked to Goated.com and currently holds around $131,000.
This partial reversal follows a decision that targeted wallets reportedly associated with unrelated businesses. ZachXBT noted at least one impacted entity indicated the action was tied to a sealed US civil case, though no public justification was provided.
Following an independent review, ZachXBT found the wallets appeared operational with no indication of illicit behavior. The situation has drawn sharp criticism from market commentators and researchers regarding transparency and process.
ZachXBT tweeted that, in his experience, “it could potentially be the single most incompetent freeze I have seen.” He argued the incident shows what happens when freezing decisions are outsourced to “any random federal judge” without a proper internal process.
MetaMask security researcher Taylor Monahan stressed that freezing user funds demands thorough investigative work and accountability. She criticized Circle‘s approach, noting the company typically enforces court-approved freezes even when details remain unclear.
Several commentators slammed the original move, arguing such actions risk disrupting legitimate business. One observer said unfreezing a single wallet does little to change the bigger picture.
