Circle refused to assist in recovering fraudulent funds, and Wisconsin prosecutors filed criminal charges

Wisconsin prosecutors have filed criminal charges against stablecoin issuer Circle for refusing to cooperate with a court order to assist in recovering funds from fraud victims. A Wisconsin victim was cheated of about 381,000 USDC coins. The court issued a writ in December last year requiring Circle to transfer frozen assets to law enforcement agencies 'wallets, but Circle refused to enforce it on the grounds that it was "technically impossible to destroy and reissue the tokens." New York state prosecutors have also previously written to the U.S. Senate, accusing Circle of repeatedly refusing requests to freeze assets without order and questioning its interest motives-Circle currently holds at least 119 million frozen USDC units and can continue to earn interest income. Circle denied the charges, saying the Wisconsin court had no jurisdiction and said it had reached a preliminary agreement with federal prosecutors on a victim compensation mechanism. Cryptocurrency tracking experts point out that Circle can completely destroy and reissue tokens by updating the code, and there is doubt that its technology is powerless.