Crypto detective ZachXBT is calling out Circle again, this time amid the company’s insane Wall Street debut. On X, Zach said: “Circle leadership does not actually care about the industry.”
Circle’s IPO launched with below $40 price per share and exploded past $300 in just over a month. At its peak, the company was valued at nearly $80 billion.
This isn’t Zach’s first fight with Circle or its CEO, Jeremy Allaire. He’s been on them for years, and the IPO only made him madder. Coinbase and Ripple were rumored to be eyeing an acquisition of Circle earlier in April, but the company rejected those talks to go public and chase a higher valuation.
Zach calls out freezing failures and doubles down on criticism
Back in February, Zach showed up in Jeremy’s replies on X, demanding answers on why Circle hadn’t frozen 115,000 USDC linked to a Bybit hack attributed to North Korea’s DPRK, despite Tether already freezing 106,000 USDT tied to the same theft. Zach wrote:
“How about you tell the entire community why Circle has yet to freeze 115K USDC… Meanwhile Tether already froze 106K USDT multiple hours ago… How many more examples will people have to show until the space understands Circle is a bad actor.”
He also dropped the hacked wallet address: 0xDa2e12E94060720581994eEc870F83d9C7200c2c, accusing Circle of dragging its feet. He added that: “Jeremy needs to add ‘funding nukes’ to his bio.”
Later, when another major hack hit, he said:
“How can you expect loyalty when Circle does not freeze 9M+ $USDC after a $40M exploit that sat for 1–2 hours where the attacker also used CCTP to bridge from Arbitrum to Ethereum.”
Despite all this, Jeremy and Circle have stayed silent. No replies. No statements. Just a full ghost.
But two weeks before his latest post, Zach did admit, “I trust Circle, Paxos, or Tether infinitely more than Ripple.” But trust doesn’t mean approval. He’s not letting up. His issue is with how Circle handles accountability, and who’s really running things behind the scenes.
Arthur Hayes slams the Coinbase-Circle deal and Jeremy’s position
And it’s not just Zach who thinks something stinks. Last month, Arthur Hayes published a blog post aimed directly at the heart of the Circle–Coinbase relationship. Arthur said Jeremy had “no choice but to assume the position at the behest of his daddy gimp Coinbase CEO Brian Armstrong.”
Arthur was pointing to a $900 million payout from Circle to Coinbase, money handed over in 2024 as part of a distribution deal tied to USDC.
That deal goes back to 2018, when Circle and Coinbase teamed up to form the Centre Consortium to jointly manage USDC. In 2023, that arrangement ended, Circle took full control, and Coinbase got a minority stake. But even after splitting the venture, they agreed to share USDC revenue 50/50.
Meaning Coinbase earns half of the interest on USDC reserves, regardless of whether the assets are on its platform. This cost Circle nearly a billion dollars last year alone.
Arthur wrote that Circle needs Coinbase to survive in the market, especially since Tether (USDT) still dominates most trading pairs globally. Hayes explained, “Distributing a stablecoin can be very expensive unless you are owned by a captive exchange, social media company, or legacy bank.”
According to him, Tether didn’t have to worry about that, because it was born inside Bitfinex, which already had a giant user base. But for Circle, there was no built-in customer base. They needed Coinbase for distribution. That’s the cost.
Arthur said crypto exchanges like Coinbase demand either equity or a cut of net interest margins to support a stablecoin. And in Circle’s case, it’s 50%. He even said the deal boiled down to Jeremy “accepting Brian Armstrong’s star-spangled dick sans lube.”
Arthur added that Coinbase had to find a stablecoin outside of Tether’s orbit, since its users are mostly in America and Western Europe. Tether was constantly under fire from Western media. But when Commerce Secretary Howard Lutnik helped get Tether banked via Cantor Fitzgerald, the narrative started changing. Still, Coinbase had already doubled down on Circle. That’s why the deal stuck.
