ZachXBT Accuses Circle and Jeremy Allaire of Failing to Freeze USDC During Exploits

Blockchain investigator ZachXBT raised concerns about Circle Internet Group and CEO Jeremy Allaire after the company expanded its relationship with Hyperliquid. The criticism focused on Circle’s history of handling major exploits involving $USDC freezes.

ZachXBT argued that Circle promotes support for crypto communities during growth periods. However, he questioned whether the company would act quickly during a large-scale security incident. He specifically pointed to a potential eight or nine-figure exploit affecting Hyperliquid’s core infrastructure or HyperEVM ecosystem.

The comments surfaced shortly after Circle announced broader technical and financial commitments to Hyperliquid. The stablecoin issuer confirmed that $USDC will operate as an Aligned Quote Asset across several Hyperliquid improvement proposals, including HIP-1 through HIP-4 markets.

Circle Expands $USDC Infrastructure on Hyperliquid

Circle described Hyperliquid as a fast-growing environment for decentralized trading and on-chain liquidity. The company explained that $USDC already serves as a major collateral asset across the ecosystem. Moreover, Circle plans to strengthen that position as Hyperliquid expands into new market categories.

The Aligned Quote Asset framework allows stablecoins to integrate more deeply into Hyperliquid’s infrastructure. Consequently, $USDC will support liquidity management, collateral movement, and trading pair settlement across the network.

Circle also highlighted the importance of native minting, redemption, and cross-chain transfer tools for HyperEVM users. Additionally, the company emphasized seamless access to digital dollars for traders operating across multiple blockchain ecosystems.

Besides infrastructure support, Circle increased its financial exposure to the network. The company revealed plans to stake 500,000 $HYPE tokens after previously purchasing $HYPE during its initial ecosystem investment in 2025.

According to Circle, staking strengthens economic alignment with Hyperliquid while helping secure the network. The company also signaled potential validator participation in the future.

$HYPE Price Climbs Despite Debate

Despite the criticism surrounding Circle’s exploit response policies, Hyperliquid continued moving higher. $HYPE traded at $41.67 following a 6.16% daily increase. However, the token still posted a 2.06% decline over the past week.

Trading activity remained elevated, with 24-hour volume surpassing $332 million. Meanwhile, Hyperliquid’s circulating supply stood near 240 million tokens, giving the project a market capitalization above $9.9 billion.

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