USDC: The Stablecoin That Can Freeze You

You’ve probably heard that $USDC is backed 1:1 by the dollar and is regularly audited. But what almost no one talks about is: it can also be frozen — literally or even erased from your wallet.

Circle, the issuing company of USDC, has total control over the smart contract that governs the stablecoin. This means that, unlike Bitcoin, your $USDC can be blocked or erased at the company’s discretion.

In the USDC code, there are administrative functions such as:

function blacklist(address user) – prevents an address from using USDC.

function freeze(address user) – blocks all USDC transactions from an address.

function wipeFrozenAddress(address user) – erases USDC from a frozen address.

Yes, that’s right: the company can erase your funds if your address is put on the “blacklist.”

✅ And this is not a theoretical power — it has already been used. In 2020, Circle froze US$73,260,732.78 from a user at the request of authorities due to suspicion of involvement in fraudulent activities.

🔎 With this, I ask you: is this security or censorship disguised as protection? Why should there be a crypto that can be blocked or even erased from your account by a centralized institution?

The truth is that Circle is subject to the rules of the U.S. financial system. It is registered, audited, and follows anti-money laundering (AML) and counter-terrorism financing (CFT) laws.

This makes USDC more reliable for companies and institutions that need to operate within the law — with traceability and reversibility, if necessary. Additionally, it clarifies the rules regarding its use, ensuring predictability for businesses.

🤔 But what’s the advantage for you?

For ordinary users, if your stablecoin is stolen and the case goes to court, it can be recovered.

But it also brings risks: a mere misinterpretation or indirect involvement can lead to your funds being blocked.