USDC issuer Circle launches compliance engine for programmable wallets, ZachXBT reacts

• Circle has announced the release of its latest regulatory product, the Compliance Engine for Programmable Wallets.
• The product helps companies meet regulatory requirements through automated checks.
• Circle has faced criticism from “crypto detective” ZachXBT and community members over their recovery procedures.

USDC issuer Circle launched a new product, the Compliance Engine for Programmable Wallets, on Tuesday. The product is designed to help companies build products in the chain, while meeting regulatory criteria in their respective regions.

Circle adds a new product to help with regulatory compliance

In a press release on Tuesday, Circle announced the launch of Compliance Engine, a product designed to help companies build on-chain without facing the rigors of regulation.

The announcement states that this new engine will help companies protect users and “meet regulatory requirements with customizable and automated compliance checks.”

The product has three major components: transaction screening, transaction monitoring and travel rules. Each feature is said to help companies adapt to changing regulatory requirements.

Circle is the issuer of the second largest stablecoin, USDC, which has a market cap of $35.9 billion and a daily trading volume of $6 billion, according to CoinGecko data.

Circle CEO Jeremy Allaire also posted that the Compliance Engine is the company’s way of sharing its “compliance capabilities” with teams and companies looking to chain products.

However, the product launch met with mixed reactions among members of the crypto community, with ZachXBT criticizing the company’s alleged failure to challenge bad actors.

ZachXBT claims Circle failed to crack down on bad actors who ripped off users and used USDC wallets to transact funds. This includes a 2023 supply chain attack on the Ledger login kit where multiple users’ funds were stolen. ZachXBT claims Circle did nothing despite having plenty of time to blacklist suspicious accounts.

He also points to the company’s failure to act after Avi exploited Mango and moved the funds through USDC.

“If Circle has such solid compliance, how was Avi able to deposit $32.5 million in two txns to his Circle account from the Mango exploit without triggering anything?” ZachXBT replied to Jeremy Allaire’s X post.