Wisconsin Prosecutor Charges Circle With Refusing to Facilitate 381,000 USDC Recovery in Romance Scam

According to an ICIJ report, Wisconsin prosecutor Thomas Binger charged Circle with refusing to comply with a December court warrant aimed at recovering 381,000 USDC stolen in a romance-investment scam. The warrant directed Circle to invalidate the frozen tokens and issue equivalent new USDC to the sheriff's office wallet. Circle froze the funds when ordered but later claimed it lacked the technical ability to burn and reissue tokens. Circle called the complaint meritless and stated it freezes assets only when compelled through lawful process to protect users from arbitrary interference.

Blockchain researcher Yury Serov estimates Circle holds approximately 119 million frozen USDC tokens. In response to similar concerns from New York prosecutors in January, Circle revealed it reached a general agreement with federal prosecutors to support a new mechanism: permanently freezing flagged stablecoins and minting equivalent new tokens for victims. Circle did not confirm whether this mechanism could address the Wisconsin case.