Circle Internet (CRCL) CEO Jeremy Allaire has publicly defended the company's policy of not freezing USDC wallets without a court order, despite facing criticism for allowing significant losses tied to hacking incidents. Allaire stated that Circle operates under a clear legal obligation, emphasizing that actions like freezing wallets should only occur at the direction of law enforcement or through court orders. Critics, including blockchain investigator ZachXBT, have pointed out that this approach has permitted over $420 million in illicit funds to escape since 2022, as delays in freezing wallets have allowed stolen USDC to remain accessible for hours or even days. In contrast, rival Tether, which issues the largest stablecoin USDT, has been more proactive, freezing funds linked to hacks within hours. This ongoing debate raises concerns about the balance between regulatory compliance and the rapid response needed in the fast-paced world of cryptocurrency. Some experts argue that allowing issuers to act beyond legal requirements could undermine the foundational principles of decentralized finance (DeFi), potentially eroding trust in these systems. Allaire's remarks come amid increasing scrutiny of Circle's practices, particularly following a recent exploit that resulted in losses of up to $280 million linked to North Korea.