Circle sued over USDC fraud case, accused of refusing to aid victims

Circle, the issuer of the USDC stablecoin, is facing a criminal complaint in Wisconsin after prosecutors say the company failed to comply with a court order to freeze and return about 381,000 USDC that were stolen in an online scam. The complaint alleges Circle did not invalidate the frozen tokens or re‑issue an equivalent sum to law enforcement, prompting the company to seek dismissal of the case and argue it lacks the technical ability or legal duty to do so.

Law enforcement officials in other U.S. jurisdictions, including New York, have similarly accuse Circle of declining to cooperate with requests to freeze or recover assets linked to fraud. The dispute highlights a broader debate over the responsibilities of stablecoin issuers when their tokens are used in criminal schemes and could set a precedent for how such companies must respond to court orders and victim restitution.