Circle’s Chief Strategy Officer Dante Disparte published a direct defense of the company’s authority to freeze USDC (USDC), naming the $270 million Drift Protocol exploit as the catalyst.

The blog post and a separate X statement followed weeks of criticism from onchain investigator ZachXBT, who accused Circle of inaction while stolen funds moved through its Cross-Chain Transfer Protocol.

Circle framed its freeze capability as a compliance obligation rather than a discretionary tool. He wrote that USDC freezes happen only when the law compels action through a formal process.

When Circle freezes USDC, it is not because we have decided, unilaterally or arbitrarily, that someone’s assets should be taken from them. It is because the law requires us to act,” wrote Disparte in a blog.

The statement appeared to address ZachXBT’s earlier accusation that Circle failed to freeze stolen USDC during the April 1 exploit.

Circle was asleep while many millions of USDC was swapped via CCTP from Solana to Ethereum for hours from the 9 figure Drift hack during US hours.

Value was moved and nothing was done yet again.

Comes days after you froze 16+ business hot wallets incompetently which is still… pic.twitter.com/T0Xwg1HIfO

The investigator had noted that hundreds of millions in USDC moved from Solana (SOL) to Ethereum (ETH) via CCTP during U.S. business hours without intervention.

Disparte also acknowledged a tension familiar to the crypto industry. He argued that the same framework protecting holders from arbitrary interference also limits how fast an issuer can act during an active exploit.

Recent events are a reminder that trust in digital assets depends on security, accountability, and the rule of law across the ecosystem.

Circle is a regulated company that complies with sanctions, law enforcement orders, and court-mandated requirements. We freeze assets when… pic.twitter.com/zG0FZzCd1n

Beyond defending existing policies, Disparte called for new legal structures that would allow issuers and exchanges to respond more quickly to theft without creating overreach risks.

He said the tools to intervene exist, but the legal authorization for rapid, coordinated action does not.

He pointed to the GENIUS Act and the CLARITY Act as vehicles for codifying those standards. The U.S. Treasury Department is already advancing rulemaking to implement the GENIUS Act, with the FDIC approving a proposed rule on April 7.

In a parallel move, Disparte published an op-ed urging the UK to claim a second-mover advantage in stablecoin regulation.

Today, I published a piece in the @FT urging the UK to claim a second mover advantage in regulating stablecoins and crypto. Borrowing the best of Europe's MiCA and the U.S. GENIUS Act (and upcoming Clarity Act) can create a common harmonized market.https://t.co/xWjTrJkuZK

He argued that combining elements of Europe’s Markets in Crypto-Assets Regulation (MiCA) with the GENIUS Act framework could position London as a competitive hub.

The contrast between aggressive civil enforcement and perceived inaction in the face of a confirmed exploit remains a focal point for critics questioning how regulated issuers exercise their freeze authority.

The post Circle Explains Why It Didn’t Freeze Stolen USDC in the $275 Million Drift Hack appeared first on BeInCrypto.

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