The stablecoin market has encountered a paradox: USDT issuer Tether has already returned over a billion dollars to fraud victims, while its competitor Circle faces criminal prosecution for refusing to compensate losses of $381,000. The situation exposes fundamental differences in the approaches of the two industry giants.
The Case Against Circle: From Romance to Criminal Code
In May 2025, a resident of Walworth County fell victim to a romance scam. A fraudster using a fictitious name convinced him to transfer his savings into USDC on a fake investment platform. The court ordered Circle to freeze these tokens in August, and in December demanded the coins be voided and an equivalent amount issued to the victim's account. The company refused, citing technical limitations and lack of jurisdiction. In response, the Wisconsin prosecutor's office filed a case of obstruction of justice.
Why Does Tether Act Differently?
USDT issuer uses specialized software to remotely void tokens on hackers' addresses and reissue them to victims. This has allowed the company to freeze $4.7 billion in assets and return approximately $1.1 billion to owners. The T3 unit, in collaboration with TRON, recently blocked over $450 million. In the US, law enforcement seized $61 million in USDT in one case.
Circle, on the other hand, only blocks tokens when there is a legal basis. This policy helps avoid arbitrary freezes and has strengthened USDC's position in Europe under MiCA regulations. However, the New York prosecutor's office points to a conflict of interest: Circle continues to earn income from the reserves backing the frozen tokens. According to analyst Yuri Serov's estimates, at least 119 million USDC are currently frozen.
Expert Opinion
The difference in approaches is not a matter of technology, but of corporate philosophy. Tether, seeking to improve its compliance reputation, acts flexibly and proactively. Circle, preparing for an IPO on the New York Stock Exchange, prioritizes legal purity over speed of response. The current precedent could be a turning point: if the court orders Circle to compensate for damages, it would set a standard for all stablecoin issuers. Then the "double standards" would become a thing of the past, giving way to unified rules of the game.