Circle CEO Jeremy Allaire pushed back on claims that USD Coin (USDC) could be used to pay tolls for passage through the Hormuz Strait by Iran. Allaire told reporters in Seoul on April 13 that the company maintains a high standard of compliance and works closely with law enforcement and sanctions authorities. He cited publicly available research from United Nations bodies and forensic firms suggesting that sanctioned entities tend to favor other stablecoins. Allaire noted that assets could be frozen instantly only under law enforcement or court orders, and that the question of USDC’s use in Hormuz is not supported by evidence.
Allaire also described the Drift protocol hack on April 1, which cost $285 million, and said Circle did not freeze funds during the six-hour window as hackers moved roughly $230 million of stolen USDC from Solana to Ethereum. He emphasized that Circle adheres to strict legal obligations and that asset freezes occur only under orders. He added, “We don’t decide what is desirable. If private companies make such calls, it would raise serious ethical concerns.” He also acknowledged gaps in the current regulatory framework and said Circle has urged lawmakers to include a safe harbor clause in the CLARITY Act.
Circle has noted that the CLARITY Act would ban certain payments, and that the act would not directly affect Circle. The GENIUS Act already bans issuers from paying interest to holders, and the practical impact would fall on exchanges and wallets, which could continue to offer trading incentives but could not market holdings as bank-like deposits. Allaire described the ongoing interest debate as overblown, noting that most stablecoin holders globally do not receive yields.
During his Seoul visit, Allaire met with major crypto exchanges, banks, and regulators; Upbit operator Dunamu and Bithumb signed MOUs with Circle. He also met with executives at Shinhan Bank, Hana Bank, and KB Financial Group. Korean law is expected to require a domestic bank-led consortium to oversee such a token, and Circle has no plans to issue a won stablecoin. Circle plans to provide its technology platform to local issuers.
Leave a Reply