Circle removes 1/16 USDC wallets from blacklist after backlash.

on-chain investigator ZachXBT said Circle has unfrozen USDC in a wallet that was part of a group of 16 wallets previously blacklisted by Circle .

In a post on X on Wednesday, ZachXBT said the wallet “0x61f…e543” (allegedly associated with Goated.com) is now able to use USDC again. According to Arkhamdata , this wallet currently holds 130,966 USDC. ZachXBT also Chia on Telegram that other affected wallets will likely be restored “in the near future.”

This move follows Tuesday's report that Circle had frozen USDC on 16 "hot wallets" linked to various businesses, Capital it 's unclear whether they are directly related. At the time, ZachXBT said he spoke with at least one affected party and learned the freeze might be related to a civil lawsuit in the U.S., but the case was sealed and no information was publicly available.

ZachXBT criticized the New York civil lawsuit for being sealed, and argued that Circle “provided absolutely no basis” for freezing so many business wallet addresses. He called it possibly “one of the most incompetent freezes” he’d seen in over five years of investigation, and that this happened because the decision to freeze was “left” to the judgment of a federal judge instead of following a clear process.

Circle 's freezing of 16 wallets also sparked a strong reaction from the crypto community, reviving long-standing concerns about the centralization of stablecoin control mechanisms. Taylor Monahan, a security researcher at MetaMask, commented that this wasn't the first time Circle had "wrongly frozen" wallets, and it's unlikely to be the last, while also complaining about a lack of accountability and a lack of appeals mechanisms.