Circle Partially Lifts Freeze on USDC Wallets Amid Ongoing New York Civil Case

Circle Internet Group has unfrozen two business-linked hot wallets tied to a sealed New York civil case, according to blockchain investigator ZachXBT. This move comes after Circle froze USDC balances across 16 operational business hot wallets, citing compliance with an ongoing U.S. legal matter.

ZachXBT reported that five of the 16 frozen wallets have been restored, labeling this freeze as 'potentially the single most incompetent' in his five-plus years of investigations.

The affected wallets reportedly belonged to multiple unrelated businesses. Circle's decision to unfreeze these addresses follows growing scrutiny over last week's freeze tied to case number 26-cv-2327, a sealed civil case with no public details available.