Circle CEO Says Freeze-and-Seize Tools Give Stablecoins an Edge Over Correspondent Banking
Circle CEO Jeremy Allaire said stablecoin infrastructure can freeze and seize assets, a capability he argued is superior to correspondent banking after a $6.3 billion hack at Binance.
Jeremy Allaire, CEO of Circle, made the claim during an appearance on CNBC’s Squawk on Street program on Wednesday. Circle relies on Binance as a core distribution channel for its USD Coin (USDC) stablecoin.
Allaire stated that Circle’s infrastructure carries regulatory-required tools to freeze and seize assets on blockchain networks. He contrasted this with correspondent banking, the system of bank-to-bank accounts that moves money across borders, which offers no such option.
There’s nothing like that at all happening here.
Impact of the Binance Hack
The claim comes after a roughly $6.3 billion hack at Binance. It was reported that Circle has frozen more than $1.1 billion in USDC since the October 29 attack. Blockchain analytics firm Elliptic estimated that about $3.24 billion of stolen crypto remains in wallets tied to the theft.
Circle expanded its deal with Binance to five years in September, a move that included Binance buying $100 million of Circle shares. Allaire said Binance has started to see net deposits return, rejecting any comparison to the collapse of the FTX exchange.
Future Regulation and Limitations
Allaire tied the faster pace of attacks to artificial intelligence (AI) agents, software that acts on its own. The breach was traced to two engineers’ compromised computers, one of which was reached through a fake job interview.
Allaire said the breach will influence future regulation. Custodia Bank CEO Caitlin Long expects US regulators to push for built-in stablecoin freeze rules. However, freeze powers cannot reach coins that have no issuer, such as Bitcoin (BTC), which may temper how far regulators lean on Allaire’s argument.
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