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

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

Circle adds new product to aid regulatory compliance

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

The announcement states that this new engine will help businesses protect users and "meet regulatory requirements with customizable, automated compliance checks."

The product has three major components: transaction screening, transaction monitoring, and travel rules. Each function is said to help businesses 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 businesses that intend to bundle products on-chain. 

However, the product's launch has met mixed reaction among crypto community members, with ZachXBT criticizing the company's alleged failure to challenge bad actors.

ZachXBT alleges that Circle failed to act against bad actors who robbed users and used USDC Wallets to transact funds. This includes a 2023 supply chain attack on the Ledger connect kit where several users’ funds were stolen. ZachXBT claims that Circle did nothing despite having enough time to blacklist suspected accounts.

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

"If Circle has such robust compliance, how was Avi able to deposit $32.5 million in two txns to his Circle account from the Mango exploit with zero obfuscation without triggering anything?" ZachXBT replied to Jeremy Allaire's X post.