Circle's move, claiming no technical ability to freeze, prosecutors directly filed criminal complaints. The gray area of stablecoin compliance is finally about to be exposed.

According to an investigation by the International Consortium of Investigative Journalists (ICIJ), law enforcement agencies in the United States—specifically in Wisconsin and New York—accused stablecoin issuer Circle of refusing to cooperate in freezing or returning victims’ funds in certain fraud cases. The reports said that prosecutors in Wisconsin have filed a criminal complaint against Circle over a case, and that prosecutors in New York had previously also written to U.S. senators, criticizing Circle for not actively cooperating with law enforcement in some cases. Circle responded that the relevant allegations are unfounded; the company does not have the technical capability to execute the court orders involved, and the relevant courts have no jurisdiction over it. At the same time, it said it will only freeze assets in accordance with legal procedures to protect users’ rights.