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Blockchain investigator ZachXBT links USDC activity to North Korea as Circle moves forward with plans to launch a federally regulated National Trust Bank.
Controversial claims have surfaced surrounding Circle’s stablecoin, USDC, as popular blockchain investigator ZachXBT alleges that North Korea is using the token to facilitate illicit transactions. The timing of the allegations is particularly sensitive, as Circle has recently filed to become a national trust bank in the United States following its successful IPO that valued the firm at nearly $18 billion.
Circle Eyes Banking Charter Amid Regulatory Tightening on Stablecoins
According to ZachXBT in a recent X post, North Korean IT operatives, many of whom work for sanctioned state-backed groups, are actively using USDC to process high-volume payments. Despite Circle’s claims of strict compliance protocols, the investigator stated bluntly that the company is doing “nothing” to prevent such transactions.
He even pointed to “high eight figures” worth of suspicious volume linked to North Korea’s operations, asserting that the stablecoin firm has failed to enforce meaningful oversight.
Meanwhile, Circle is applying to become a federally chartered national trust bank in the U.S. Under the name First National Digital Currency Bank, N.A., the new institution would allow Circle to self-custody the reserves backing USDC, currently held at BNY Mellon and managed by BlackRock, and provide asset custody services to institutions.
Circle’s co-founder and CEO, Jeremy Allaire, emphasized that this move is part of the company’s shift from the early-adoption era of crypto to becoming a mainstream financial player. If approved, the bank charter would lend credibility to Circle’s growing institutional ambitions, particularly as the firm shifts its focus toward tokenizing traditional financial assets, such as bonds and equities.
Stablecoin Regulation Push Gathers Momentum
Circle’s regulatory ambitions are unfolding alongside a significant policy shift in the U.S. Senate. A newly passed stablecoin bill would require issuers, such as Circle, to maintain full reserves and provide monthly public disclosures. This step, many believe, will normalize the use of stablecoins in the mainstream economy. With a House vote and potential President Trump endorsement looming, the stablecoin market is poised for a pivotal transformation.
If approved as a trust bank, Circle would be uniquely positioned to capitalize on this regulatory clarity. Still, the firm must first overcome mounting concerns about its risk exposure, especially in light of the North Korea-USDC controversy.
