Circle's USDC Used By North Korea Claims ZachXBT, US Banking License Under Threat?

Popular blockchain investigator ZachXBT noted that the sanctioned state of North Korea is using Circle’s (NASDAQ: CRCL) native stablecoin USDC, and that they are doing “NOTHING” to freeze the activity. This revelation comes as the stablecoin firm applies for a US banking license, following its successful IPO in June. The CRCL stock is already facing some selling pressure, down by 28% over the past week.

ZachXBT Raises Concerns Over Circle’s USDC Compliance Practices

Blockchain investigator ZachXBT has alleged that Circle’s USD Coin (USDC) is a key infrastructure used by North Korean IT workers to process illicit payments. The allegation comes just after the stablecoin firm applied for the US State Bank License, after a blockbuster IPO on Wall Street in June.

Additionally, ZachXBT further criticized the USDC issuer for failing to take action to detect and freeze the activity, despite claiming to have strict compliance protocols. “I can point out high eight figures in recent volume,” ZachXBT claimed, suggesting that millions of dollars have flowed through the network unchecked. The investigator further stated that no one would care at this point since it is a “crime super cycle”.

North Korea’s Lazarus Group is behind several crypto thefts in the past, targeting some of the top crypto exchanges globally. As the crypto adoption accelerates worldwide, the G7 countries also discussed measures to deal with North Korea’s crypto hacking empire.

Responding to ZachXBT’s comment, an XRP supporter questions whether it would be better to use RLUSD instead, since it’s backed by parent firm Ripple. Responding to this, ZachXBT said:

“I trust Circle, Paxos, or Tether infinitely more than Ripple. They all at least have organic users whereas Ripple does not and theirs comes from misrepresenting paid partnerships to make it appear like adoption.”

What Happens to CRCL Stock Next?

Following a blockbuster IPO on NYSE in June, the Circle stock (CRCL) rallied all the way to $300, nearly 10x from its issue price of $31. However, the stock has come under some selling pressure recently as big players like Cathie Wood have been selling from the top. Over the past week, the CRCL stock price has tanked by 28% and is currently finding support at $180.

But Bernstein analysts believe that it’s time to buy the dips, and the CRCL stock could see another 30% upside to $230. ““CRCL is a long-term must-hold as a stablecoin category leader and for investors wanting to be exposed to Circle’s long-term transformative payments’ story,” noted the analysts.