Circle Explains Why It Watched $270M USDC Walk Out the Door: It's the Law, Not Lazy Compliance

Circle's chief strategy officer Dante Disparte is done being the villain of this story.

In a new blog post, Disparte defended Circle's decision not to freeze stolen USDC during the $275 million Drift Protocol exploit, pushing back against onchain investigator ZachXBT's accusations of inaction.

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

ZachXBT had previously pointed out that hundreds of millions in USDC moved from Solana to Ethereum via Circle's Cross-Chain Transfer Protocol during U.S. business hours on April 1 with zero intervention. According to the investigator, the stolen funds were swapped for hours while Circle allegedly sat idle—coming just days after the firm froze over 16 business hot wallets.

Circle framed its freeze capability as a compliance obligation, not a discretionary switch. The same legal framework protecting users from arbitrary interference also prevents the issuer from acting faster during an active exploit.

Disparte didn't stop at defense. He called for new legal structures that would let issuers and exchanges respond quicker to theft without creating overreach risks. He pointed to the GENIUS Act and the CLARITY Act as potential vehicles for codifying those standards.

The U.S. Treasury is already moving on GENIUS Act implementation, with the FDIC approving a proposed rule on April 7.

In a separate FT op-ed, Disparte urged the UK to position itself as a stablecoin regulatory leader by borrowing the best from Europe's MiCA and the U.S. GENIUS Act framework.

Critics still aren't buying it. The gap