Circle CEO Jeremy Allaire addressed recent questions regarding the potential use of USDC in facilitating crypto transit tolls at the Strait of Hormuz, while also responding to criticism over the company’s response time during a major protocol exploit. Allaire delivered his remarks during a Seoul press conference attended by local crypto stakeholders, exchanges, and regulators, as part of his visit to South Korea this week.
Concerns about USDC and Iran’s Strait of Hormuz transit
Jeremy Allaire, who leads Circle—the Boston-based company behind the USDC stablecoin widely used for global payments—was questioned about reports suggesting Iran’s Revolutionary Guards might accept USDC payments for passage through the strategic Strait of Hormuz. The region is known for its geopolitical friction and its critical role in global oil shipping routes.
In response, Allaire pushed back on such speculation, emphasizing the company’s ongoing commitment to compliance. He explained that Circle works closely with law enforcement and international sanctions authorities to monitor the flow of its stablecoin and prevent illicit transactions.
Circle operates a highly compliant infrastructure.
He referenced investigations by the United Nations and several blockchain analytics firms, which point out that sanctioned entities often choose alternative stablecoins with less oversight rather than USDC for such transactions. Allaire refrained from naming specific tokens but noted the trend away from USDC among sanctioned actors.
It’s highly unlikely that a regime under sanctions would attempt something where the likelihood of the assets being immediately frozen is extremely high.
As background, Circle is recognized for its regulatory-compliant infrastructure and has established itself as a major issuer of stablecoins in the global digital asset market, working with financial institutions and being subject to rigorous oversight in a shifting regulatory landscape.
Drift Protocol hack and legal constraints on freezing funds
The April 1 exploit of the Drift Protocol, which resulted in the theft of $285 million with about $230 million in USDC being transferred from Solana to Ethereum, drew criticism as observers noted Circle’s delay in freezing the stolen funds. The company has faced scrutiny on whether it could have acted faster to prevent the laundering of the funds during the six-hour window.
Allaire clarified that Circle can only freeze wallets at the direction of law enforcement or the courts, as dictated by legal requirements. He pointed out the risk of creating a moral dilemma if private companies were to unilaterally decide which accounts to restrict without official orders.
We do not as a company decide what is the right path. Allowing a private firm to make those calls creates a very significant moral quandary.
He acknowledged gaps in the current regulatory framework and shared that Circle is advocating for the inclusion of “safe harbor” provisions in new legislation—specifically the proposed CLARITY Act—that would allow issuers to freeze funds proactively in emergency scenarios. Allaire stressed the importance of such authority being embedded in law rather than left to individual company policy.
We need that to be in the law, not just what we decide on our own.
Additionally, Allaire commented on the CLARITY Act’s proposal to ban interest payments on passive stablecoin holdings. He said this move would not impact Circle directly since current laws already prevent issuers from paying interest, with most global stablecoin holders receiving no such rewards. He noted that the bill’s real effect would be felt by exchanges and wallet providers, who would still be allowed to offer activity-based incentives.
During his visit, Allaire also met with major Korean exchanges like Upbit and Bithumb, as well as leading banks, to discuss partnerships. While Circle does not intend to issue a Korean won stablecoin, the company plans to provide its technology to local issuers working within the country’s regulatory framework.
