ZachXBT Slams Circle After $80B IPO Over USDC Failures

- Crypto analyst ZachXBT accuses Circle of negligence in freezing USDC tied to hacks. - The criticism follows Circle’s $80 billion valuation after its IPO. Crypto analyst ZachXBT has slammed Circle following its highly successful Initial Public Offering (IPO), accusing the company of failing to act swiftly on USDC stablecoins linked to illicit activities. On June 7, 2025, the company held its IPO, raising approximately $1.1 billion. According to VnExpress International, its valuation surged to nearly $80 billion within a month as initial share prices skyrocketed from under $40 to over $300. On July 14, Cryptopolitan reported ZachXBT’s sharp criticisms of Circle and its CEO, Jeremy Allaire, claiming the company does not actually care about the industry. ZachXBT specifically pointed to delays in freezing USDC tied to major exploits. For example, he cited 115,000 USDC stolen in a Bybit hack, attributed to North Korea’s Democratic People’s Republic of Korea (DPRK), and contrasted Circle’s actions with Tether, which swiftly froze related USDT in the same case. He also cited another instance where over $9 million in USDC from a $40 million exploit remained unfrozen for hours. According to ZachXBT, these delays have led the crypto community to view Circle as a bad actor. This backlash has sparked broader debates about Circle’s responsiveness and commitment to operational accountability, which are particularly relevant in a volatile market where swift interventions are critical to minimizing damage. Circle, known for its flagship stablecoin USDC, has achieved remarkable growth in recent years, expanding through major partnerships and a growing corporate footprint. However, these recent controversies have cast doubts on its leadership and operational integrity. In parallel, analysts are scrutinizing Circle’s financial reliance on Coinbase. After the Centre Consortium, which previously oversaw USDC, dissolved in 2023, Circle assumed full control over the stablecoin's management. Coinbase, a former partner in the consortium, retained a minority stake in Circle and secured a substantial revenue-sharing agreement. As part of this deal, Circle paid Coinbase $900 million in 2024 for USDC distribution, and the agreement included a 50/50 split of the revenue generated from interest on USDC reserves. Some market analysts view this arrangement as unusual, given typical distribution costs associated with stablecoins. In a June 16 blog post, investor Arthur Hayes offered a pointed critique of the Circle-Coinbase dynamic. Hayes argued that Circle’s dependency on Coinbase is crucial for maintaining USDC’s market dominance amid fierce competition with Tether (USDT). He suggested that without Coinbase’s exchange ecosystem, Circle would struggle with high distribution costs, and argued the current revenue-sharing arrangement effectively acts as a “pay-for-distribution” strategy to preserve its market foothold. According to CoinMarketCap, USD Coin (USDC) was trading at $1 on July 14 at 16:16 UTC, marking a 0.007% increase in its 24-hour trading volume.