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Circle unfreezes one wallet after controversial USDC freeze

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Circle paid $461 million in distribution costs from $733 million reserve income in Q4

Circle has reversed part of its recent USDC enforcement action after one of the 16 frozen wallets regained access to funds. 

Summary

  • Circle restored access to one frozen wallet, easing pressure after criticism over its broader freeze.
  • ZachXBT said the unfrozen address linked to Goated.com held about 130,966 USDC after restoration.
  • The partial reversal kept attention on Circle’s process as transparency concerns around the case persisted.

The move has shifted attention from the initial freeze to Circle’s review process, as public questions continue over how the company handled the case.

On-chain investigator ZachXBT said Circle unfroze the wallet address “0x61f…e543,” which he linked to Goated.com. Data cited in current reporting showed the wallet held about 130,966 USDC after access was restored.

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ZachXBT also said other affected wallets could be restored soon. That update followed Circle’s earlier action against 16 wallets tied to separate business operations, including exchanges, casinos, and foreign exchange platforms.

Earlier reports said the freeze was linked to a sealed US civil case. At the same time, public reporting said the targeted wallets appeared to belong to unrelated businesses, with no clear public explanation for why all 16 were included in one action.

ZachXBT criticized the decision in strong terms. He wrote,

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“In my 5-plus years of investigations, it could potentially be the single most incompetent freeze I have seen.” 

He also said Circle had “zero basis” to freeze the funds tied to the case.

In addition, the partial unfreeze has kept the wider debate alive around how centralized stablecoin issuers handle enforcement. Market observers said restoring one wallet does not fully answer the questions raised by the earlier blacklisting.

MetaMask security researcher Taylor Monahan also called for stronger investigative standards and accountability when issuers freeze user funds. Current reporting said she pointed to the need for clearer review procedures when court-backed actions affect active business wallets.

The case has renewed attention on the powers built into centralized stablecoins such as USDC. Public reporting noted that Circle can block addresses, a feature supporters link to compliance needs and critics link to control over user funds.

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Crypto World

Bitcoin Whales Bought up 61K BTC In a Month Amid Global Uncertainty

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Bitcoin Whales Bought up 61K BTC In a Month Amid Global Uncertainty

Large Bitcoin holders accumulated 61,568 more Bitcoin over the past month against the backdrop of escalating conflict in the Middle East and macroeconomic uncertainty. 

Whales and sharks, defined as those holding between 10 and 10,000 Bitcoin (BTC), have increased their holdings by 0.45%, while wallets with under 0.01 Bitcoin have added 0.42%, or 213 BTC, over the past month, Santiment said in an X post Thursday.

The figures support recent data showing that Bitcoin exchange outflows have persisted throughout March, indicating that Bitcoin holders are accumulating rather than looking to sell. 

Santiment analysts added that whale accumulation could be a “promising sign” of an eventual breakout from the range. 

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“Ideally, the ranging pattern will break upwards when large wallets are accumulating, while retail is dumping. This has historically been a very reliable pattern to signal the start of bull cycles,” the analysts said.

Source: Santiment

Tensions in the Middle East escalated in February after the US and Israel launched strikes against Iran. Iran retaliated against several neighboring countries, and the conflict has continued since.

Some whales wait for breakout; small holders driven by FOMO

Some Bitcoin whales are taking a different approach. 

On March 19, two Bitcoin whales moved tens of millions of dollars to exchanges as Bitcoin fell and energy prices jumped after attacks on Gulf oil and gas infrastructure deepened during the Iran conflict.

Dominick John, an analyst at Zeus Research, told Cointelegraph that the whales who have been accumulating in the background are likely preparing for the next breakout.

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“Whales are scooping up BTC because they’re positioning ahead of a potential breakout, quietly stacking during consolidation periods. Small wallets are chasing the momentum, driven by FOMO during uptrends and the fear of missing the next leg up,” he said.

Related: Binance says US midterms could boost Bitcoin and stocks

“Whales tend to buy in waves, so accumulation could continue if the range holds and macro conditions stay supportive. On the other hand, if retail FOMO overheats, we could see a pause or slight sell-off before the next accumulation phase,” John added.

Fear and greed index in “extreme fear”

Meanwhile, investor sentiment remains deeply uncertain. The Crypto Fear & Greed Index returned a score of 13 on Friday, firmly in “extreme fear” territory.

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Cryptocurrencies, Adoption, Social Media, Whale
The Crypto Fear & Greed Index has been firmly in “extreme fear” territory. Source: alternative.me

Thursday’s score was 10, and both the prior week and the month of February averaged “extreme fear” ratings as well, according to the index.

Magazine: Banks want to run Vietnam’s crypto exchanges, Boyaa’s $70M BTC plan: Asia Express