Circle refuses to assist in recovering scam funds, faces criminal charges filed by Wisconsin prosecutors.

Deep Tide TechFlow news: On July 09, according to the International Consortium of Investigative Journalists (ICIJ), stablecoin issuer Circle has been criminally charged by Wisconsin prosecutors for refusing to cooperate with a court order to help recover funds stolen from scam victims. A victim in Wisconsin was scammed out of approximately 381,000 USDC. In December last year, the court issued a writ ordering Circle to transfer frozen assets to a law-enforcement wallet, but Circle refused, saying it is “technically unable to destroy and reissue tokens.”

The New York prosecutors previously also sent a letter to the U.S. Senate, accusing Circle of repeatedly refusing requests to freeze assets without a court order, and questioning whether it has a profit motive—Circle currently holds at least 119 million frozen USDC, which can continue to generate interest income. Circle denied the allegations, saying the Wisconsin court lacks jurisdiction, and stating that it has reached a preliminary agreement with federal prosecutors on a victim compensation mechanism. Cryptocurrency tracking experts noted that Circle could fully destroy and reissue tokens by updating its code, casting doubt on its claim that it is unable to do so technically.